How are the monthly Franchise Fees for a Springhill Suites By Marriott franchise calculated?
Springhill_Suites_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
| Franchise Fees: | 5.5% of Gross Room Sales per month |
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3.5 Timing of Payments and Performance of Services.
- A. Timing of Payments. Franchise Fees are due within 15 days after the end of each month. All other payments are due as invoiced. All payments will be made in immediately available funds, at the location and in the manner designated by Franchisor (which may include payment through electronic funds transfers or centralized payment processing programs as specified by Franchisor, in which case Franchisee will execute any documents, pay any fees and costs, and take any other action required by Franchisor to effect such payment).
- 3.6 Interest on Late Payments. Franchisee will pay interest on any amount that is not paid when due. Interest will accrue at a rate of 18% per annum (or, if less, the maximum interest rate permitted by Applicable Law) from the date such overdue amount was due until paid. Franchisor's right to receive interest is in addition to any other remedies Franchisor may have.
Source: Item 23 — RECEIPTS (FDD pages 139–206)
What This Means (2025 FDD)
According to Springhill Suites By Marriott's 2025 Franchise Disclosure Document, the monthly franchise fee is 5.5% of Gross Room Sales. This means that each month, a Springhill Suites By Marriott franchisee must remit 5.5% of the total revenue generated from room rentals to the franchisor.
This ongoing fee is a standard component of most franchise agreements in the hotel industry. It provides Springhill Suites By Marriott with a continuous revenue stream and aligns the franchisor's success with that of its franchisees. The fee covers the franchisee's right to use the Springhill Suites By Marriott brand name, access the franchise system, and receive ongoing support.
It is important for prospective franchisees to understand how 'Gross Room Sales' is defined in the franchise agreement, as this definition determines the base amount upon which the franchise fee is calculated. Additionally, franchisees should be aware of the due date for these payments, which is within 15 days after the end of each month, to avoid late payment penalties, which include an 18% per annum interest rate on overdue amounts.