Canopy by Hilton Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$64,100,689 - $141,712,721
Franchise Fee
$37,500
Min Cash Required
$1,100,000
Total US Locations
27
Business Summary
Canopy by Hilton offers franchises for hotels providing high-quality lodging services to business travelers, families, vacationers, and groups. These hotels operate in the upper upscale market and may also include optional branded restaurant or bar facilities.
Corporate History
Hilton Franchise Holding LLC was formed in September 2007. It became the franchisor for Canopy Brand hotels in the US on October 15, 2014. Its parent company, Hilton Domestic Operating Company Inc., and its ultimate parent, Hilton Worldwide Holdings Inc., are part of a guest lodging business that has been operating since 1946, through predecessors like Hilton Hotels Corporation. Hilton Worldwide encompasses numerous hotel brands globally, and Hilton Franchise Holding LLC currently offers franchises for several of these brands under separate disclosure documents.
Financial Overview
Investment Range
$64,100,689 - $141,712,721
Franchise Fee (Low)
$37,500
Franchise Fee (High)
$150,000
Minimum Cash Required
$1,100,000
Royalty %
5%
Marketing %
4%
Equipment Costs (Low)
$52,832,939
Equipment Costs (High)
$117,580,755
Working Capital
$1,300,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Canopy by Hilton shows strong net income and positive cash flows from operating activities. However, its financial statements indicate a reliance on a centralized cash management system operated by its parent company, Hilton, with significant intercompany receivables and payables. The company's assets and franchise contracts are pledged as collateral for some of Hilton's debt obligations. The auditor provided an unqualified opinion, and no going concern issues were raised, suggesting overall financial stability despite the complex intercompany arrangements.
Financing Details
Canopy by Hilton generally does not offer direct or indirect financing to its franchisees. However, it may, at its sole discretion, provide development incentives, which are financial contributions to assist with hotel development or conversion. These incentives do not need to be repaid unless the franchise agreement terminates prematurely or the hotel is transferred, in which case a prorated amount becomes due. The repayable amount of the incentive decreases annually over the term of the franchise agreement and does not bear interest unless it becomes repayable and payment is late, then it accrues interest at 1.5% per month. In rare circumstances, Canopy by Hilton may choose to offer other types of financing, such as mezzanine loans or guarantees.
Performance Metrics
Total US Locations
27
Franchised Units
27
Corporate Units
0
Franchising Since
2014
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
11
Litigation Summary
Canopy by Hilton has been involved in several legal actions. Currently, there are five pending class-action lawsuits filed between February 2024 and January 2025. These complaints allege that Hilton Worldwide and other hotel defendants improperly shared information and used revenue management software to set higher room rates in various hotel markets, including extended-stay and luxury segments, violating antitrust laws. Hilton Worldwide intends to vigorously defend its interests in these matters. In recent concluded actions, Canopy by Hilton settled two cases with state attorneys general in 2024 and 2025 regarding the disclosure of mandatory guest fees. These settlements involved payments to the states and agreements to improve fee transparency. In 2022, Canopy by Hilton settled a breach of contract and fraudulent inducement counterclaim from a former franchisee, Portland Hotel Ownership, regarding market exclusivity and support, with both parties dismissing all claims. Older cases include a wrongful termination claim from a Hampton hotel franchisee in 2019, settled in 2020, and a class-action lawsuit in Hawaii regarding resort fees, settled in 2015. There was also an antitrust complaint against a predecessor in 1970 that resulted in a final judgment in 1971. No collection suits against franchisees were reported in 2024.
Bankruptcy History
Canopy by Hilton has no bankruptcy history to report.
Agreement Terms
Initial Term
23 years
Renewal Conditions
Canopy by Hilton franchisees do not have an automatic right to renew their franchise agreement. However, if Canopy by Hilton, in its sole discretion, agrees to re-license the hotel, the franchisee may be required to sign a new contract with terms and conditions that are materially different from the original agreement and must comply with any property improvement plan (PIP) performance conditions specified by Canopy by Hilton.
Training & Support Program
Franchisor Assistance
Canopy by Hilton provides extensive support to its franchisees. Before opening, Canopy by Hilton loans or provides electronic access to its Manual, which includes brand standards. It reviews and approves architects, interior designers, general contractors, and major subcontractors, as well as construction and furnishing plans. Canopy by Hilton also approves the hotel's management and provides the Information Technology System Agreement (HITS Agreement) for essential computer systems. It makes purchase or lease arrangements available for exterior signs, operating equipment, supplies, and furnishings. If a franchisee opts for a Restaurant Brand, Canopy by Hilton provides menu templates, design guides, and consulting. It also specifies and charges for initial and ongoing training programs. After opening, Canopy by Hilton publishes a directory including System Hotels and incorporates them into national, regional, and international marketing and advertising programs. Franchisees have access to the Reservation Service, which connects hotels to a global database and distribution systems. Canopy by Hilton also administers a quality assurance program through periodic inspections, guest satisfaction surveys, and audits, including a Service Quality Improvement Program for hotels that fall below minimum service quality standards. For hotels utilizing a Restaurant Brand, Canopy by Hilton offers a team member to provide suggestions for operations. Additionally, Canopy by Hilton may offer optional marketing programs and establish strategic partnerships with third-party companies for distribution and loyalty benefits.
Initial Training Hours
119
Training Location
Canopy by Hilton offers training through a mix of virtual, online, and on-site programs at various locations, depending on the specific course and role.
Ongoing Support
After opening, Canopy by Hilton franchisees receive ongoing support through several channels. Canopy by Hilton publishes directories of System Hotels and includes them in international, national, and regional marketing and advertising programs. Franchisees have access to the Reservation Service and participate in a quality assurance program that involves periodic inspections, guest satisfaction surveys, and audits, including a Service Quality Improvement Program for hotels that do not meet minimum standards. For hotels with an optional Restaurant Brand, Canopy by Hilton provides team member suggestions for operational improvements. Additionally, Canopy by Hilton may offer optional marketing programs and establish strategic partnerships with third-party companies for distribution and loyalty benefits.
Franchise Requirements
Ideal Candidate Profile
Canopy by Hilton seeks franchisees who can provide qualified and experienced management for their hotel. This can be the franchisee themselves, provided they receive prior written approval and complete Canopy by Hilton's training program, or an approved third-party management company. Ideal candidates or their chosen management must not be inexperienced or unqualified in managerial skills or operating capability, and must be able to adhere to the franchise agreement obligations. Franchisees are also generally prohibited from being a 'Competitor,' meaning they cannot own, license, or franchise a hotel brand that competes with Canopy by Hilton or other Hilton Network hotels.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
commercial
Owner Participation
supervisory
Territory Type
non-exclusive
Territory Size Requirements
Canopy by Hilton does not define territory size by a standard formula; instead, the boundaries of any restricted area provision will depend on the relevant market and competitive circumstances. These boundaries may be delineated using references to cities, metropolitan areas, counties, other political subdivisions, streets, highways, or a specified radius from the hotel's front door.
Staffing Notes
Canopy by Hilton requires franchisees to ensure that all hotel staff, particularly general managers, commercial and sales leaders, front desk personnel, and those using specific computer systems, complete mandatory training programs. This includes initial training for new employees and refresher training for replacements. Canopy by Hilton emphasizes that franchisees are independent employers responsible for their own personnel policies and procedures, and Canopy by Hilton does not direct or supervise franchisee staff.