What is included in the definition of 'gross room sales' for a Springhill Suites By Marriott franchise?
Springhill_Suites_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
1"Gross room sales" means all revenues and receipts of every kind that accrue from the rental of guestrooms (with no reduction for charge backs, credit card service charges, or uncollectible amounts).
Gross room sales includes: (i) no-show revenue, early departure fees, late check-out fees, fees for changes to reservations, and other revenues allocable to rooms revenue under the Uniform System of Accounting for the Lodging Industry, Eleventh Revised Edition, 2014, as published by the Hospitality Financial and Technology Professionals, or any later edition, revision, or replacement that we designate (the "Uniform System"); (ii) resort fees, destination fees, and mandatory surcharges for facilities (although inclusion of such fees or surcharges does not constitute approval by us of such fees and surcharges, which may be limited or prohibited); (iii) fees for changes to reservations and attrition or cancellation fees collected from unfulfilled reservations for guestrooms; (iv) the amount of all lost sales due to the non-availability of guestrooms in connection with a casualty event, whether or not you receive business interruption insurance proceeds; and (v) any awards, judgments, or settlements representing payment for loss of room sales.
Gross room sales excludes sales tax, value added tax, or similar taxes on such revenues and receipts.
You must account for gross room sales on an accrual basis.
Source: Item 6 — B. Other Fees That May Apply to Your Transaction (FDD pages 32–64)
What This Means (2025 FDD)
According to Springhill Suites By Marriott's 2025 Franchise Disclosure Document, gross room sales encompass all revenues and receipts derived from guestroom rentals, without any reduction for chargebacks, credit card service charges, or uncollectible amounts. This broad definition includes several specific revenue streams that contribute to the overall gross room sales figure.
Specifically, gross room sales include no-show revenue, early departure fees, late check-out fees, and fees for reservation changes, as well as other revenues allocable to rooms revenue under the Uniform System of Accounting for the Lodging Industry. It also includes resort fees, destination fees, and mandatory surcharges for facilities, although the inclusion of these fees does not imply approval by Springhill Suites By Marriott. Furthermore, the definition covers attrition or cancellation fees collected from unfulfilled guestroom reservations, the amount of lost sales due to guestroom non-availability because of a casualty event, and any awards, judgments, or settlements representing payment for loss of room sales.
However, gross room sales exclude sales tax, value-added tax, or similar taxes on such revenues and receipts. Franchisees must account for gross room sales on an accrual basis. This comprehensive definition ensures that all relevant revenue streams are included when calculating royalties and other fees payable to Springhill Suites By Marriott, providing clarity and consistency in financial reporting.