Embassy Suites by Hilton Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$50,082,670 - $82,170,820
Franchise Fee
$7,500
Total US Locations
237
Business Summary
Embassy Suites by Hilton operates high-quality all-suite hotels, providing distinctive services primarily to business travelers, families, vacationers, and groups. These hotels compete in the upper upscale hotel market segment, offering a range of amenities and services tailored to their diverse clientele. Embassy Suites by Hilton also offers the option to include eforea spas within the hotels, featuring exclusive treatment menus and design elements.
Corporate History
Hilton Franchise Holding LLC, a Delaware limited liability company, was formed in September 2007. It began operating as the franchisor for Embassy Suites by Hilton hotels in the US on March 30, 2015. The company is a subsidiary of Hilton Domestic Operating Company Inc., which in turn is a subsidiary of Hilton Worldwide Holdings Inc. The broader Hilton enterprise, including its predecessors like Hilton Hotels Corporation (HHC), has been involved in the guest lodging business since 1946. Hilton Franchise Holding LLC's immediate predecessor in offering the Embassy Suites by Hilton brand was Embassy Suites Franchise LLC (ESF), which offered franchises from October 2007 to March 2015. ESF's predecessor, Promus Hotels, Inc., licensed, owned, and operated Embassy Suites by Hilton hotels from May 1995 to October 2007. Promus's predecessors had been offering franchises under the Embassy Suites by Hilton brand from March 1984 through April 1995.
Financial Overview
Investment Range
$50,082,670 - $82,170,820
Franchise Fee (Low)
$7,500
Franchise Fee (High)
$200,000
Royalty %
5.5%
Marketing %
4%
Equipment Costs (Low)
$42,000,000
Equipment Costs (High)
$68,950,000
Working Capital
$800,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Hilton Franchise Holding LLC's financial statements received an unqualified opinion from its independent auditor, indicating that the financial position and results of operations are presented fairly. While the company's direct cash balance appears low, its financial notes clarify that it operates within a centralized cash management system with its parent company, Hilton, which includes substantial receivables from affiliates. The company also reports significant distributions of retained earnings to its parent company, Hilton, totaling $1.5 billion in 2024. Hilton Franchise Holding LLC unconditionally guarantees certain debt obligations of its parent, Hilton, which mature between 2025 and 2033, and all of its assets and franchise contracts are pledged as collateral for these debt agreements.
Financing Details
Embassy Suites by Hilton generally does not offer direct or indirect financing to its franchisees, nor does it guarantee notes, leases, or other obligations. However, it may offer development incentives for new hotels, which are financial contributions to assist with development or conversion. These incentives are considered contingent liabilities, not loans, and do not need to be repaid unless the franchise terminates before the term ends or a transfer occurs without the transferee assuming the obligation. In rare or unique circumstances, Embassy Suites by Hilton might offer other types of financing, such as mezzanine loans or guarantees, but these are not standard offerings and would be negotiated on a case-by-case basis.
Performance Metrics
Total US Locations
237
Franchised Units
237
Corporate Units
0
Franchising Since
1984
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
11
Litigation Summary
Hilton Franchise Holding LLC has several pending class action lawsuits from 2024 related to alleged antitrust violations concerning hotel room rates. These lawsuits claim improper information sharing and rate setting in extended stay and luxury hotel markets through third-party software providers. Hilton Worldwide intends to vigorously defend itself in these matters. Additionally, Hilton Domestic Operating Company Inc. recently settled two state lawsuits in 2024 and 2025 with Texas and Nebraska. These cases alleged violations of consumer protection acts due to how mandatory guest fees were disclosed. Hilton agreed to pay monetary amounts and to improve its fee disclosure practices. Earlier concluded cases include a breach of contract suit against Portland Hotel Ownership, LLC which settled in 2022, and a wrongful termination claim by San Pedro Inn, LP that settled in 2020. An older case from 1970 against a predecessor, Hilton Hotels Corporation, involved Sherman Act violations and was concluded in 1971. No collection suits were brought against franchisees or former franchisees in 2024.
Bankruptcy History
Embassy Suites by Hilton has no bankruptcy history to disclose.
Agreement Terms
Initial Term
23 years
Renewal Conditions
Embassy Suites by Hilton franchisees do not have the right to renew or extend their franchise agreement. If the franchisor agrees to re-license a location at its sole discretion, the franchisee may be required to sign a new contract with materially different terms and conditions and comply with any specified Property Improvement Plan (PIP) performance conditions.
Training & Support Program
Franchisor Assistance
Embassy Suites by Hilton provides a range of assistance to its franchisees both before and after opening. For pre-opening, this includes access to the Manual, review and approval of architects, designers, and contractors, approval of construction and furnishing plans, and approval of the hotel's management. Franchisees also receive the HITS Agreement for computer systems, and access to purchase/lease arrangements for signs, equipment, and supplies. If an eforea spa is included, design and construction guidelines, collateral, and spa menus are provided. Initial training programs are specified and made available. For ongoing operations, Embassy Suites by Hilton publishes a directory of System Hotels, provides access to its Reservation Service (subject to compliance), and administers a quality assurance program through periodic inspections and guest satisfaction surveys. It also offers operational consultations, and if an eforea spa is present, a team member provides suggestions for spa operations. The franchisor manages a monthly program fund for advertising, promotion, market research, and system-wide technology programs, and offers various sales and distribution programs, some mandatory and some optional.
Initial Training Hours
89
Training Location
Training locations vary, including virtual, online, and on-site formats. Owner orientation and new to hospitality owner education are typically virtual. Some training like pre-opening resources and eforea spa training are on-site, while other programs like HPMS, OnQ Rate & Inventory, and Hilton Honors training are offered online or virtually.
Ongoing Support
After opening, Embassy Suites by Hilton franchisees receive ongoing support through various programs. This includes access to the Reservation Service and participation in a quality assurance program with periodic inspections and guest satisfaction surveys, including Stay Score assessments. Hotels that fall below minimum service quality standards may be required to participate in a Service Quality Improvement Program, which includes a service improvement plan, re-training, and consulting. The franchisor publishes a directory of System Hotels and manages a monthly program fee that funds advertising, promotion, public relations, market research, and other marketing initiatives, as well as maintaining the Reservation Service systems and technology programs. Franchisees must also comply with ongoing technology requirements, including refreshing the OnQ computer system every three years and the Guest Internet Access system every four years. Various sales and distribution programs are offered, such as Hilton Honors guest reward programs, travel clubs, Hilton Advance Program, Group Preferred Partnership, Hilton For Business Program, and centralized payment programs for third-party reservations. Annual brand conferences are also mandatory for general managers and directors of sales, and annual compliance training is required for hotel staff.
Franchise Requirements
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
absentee-allowed
Territory Type
non-exclusive
Territory Size Requirements
The Embassy Suites brand does not grant franchisees an exclusive territory in the standard Franchise Agreement. However, the franchisor may agree to grant specific territorial restrictions, known as a 'Restricted Area Provision,' for an area surrounding the franchised hotel. This Restricted Area will encompass the immediate competitive market for the hotel, as agreed upon by the parties. The boundaries of this Restricted Area are not determined by a standard formula; instead, they vary in size and shape from hotel to hotel, depending on the relevant market and competitive circumstances at the time the Franchise Agreement is signed. These boundaries may be delineated using references to cities, metropolitan areas, counties, other political subdivisions, streets, highways, or an area defined by a specified radius from the front door of the Embassy Suites hotel.
Staffing Notes
Embassy Suites by Hilton requires franchisees to provide qualified and experienced management for hotel operations, which can be either the franchisee directly or an approved third-party management company. The franchisor evaluates proposed management based on organizational structure, prior experience in similar first-class, full-service hotels, and managerial skills. If the franchisee manages the hotel directly, they must obtain prior written approval and complete a training program. Key personnel, including general managers and commercial and sales leaders, are required to complete specific virtual or online training programs shortly after their start dates. Hotel staff utilizing systems like Hilton Property Management System (HPMS) and OnQ Rate & Inventory must also complete specific training modules before the hotel's opening. Additionally, all hotel staff are mandated to complete a 'Make a Difference' video training upon starting and follow-up training within 60 days. If an eforea spa is added, a spa director and all technical spa positions must complete product and service training before the spa opens. Annual compliance training topics such as diversity, harassment prevention, and cybersecurity are also required for hotel staff.