Hilton Hotels & Resorts Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$49,685,442 - $204,323,235
Min Cash Required
$1,600,000
Total US Locations
187
Business Summary
Hilton Franchise Holding LLC offers franchises for Hilton hotels, which are first-class, full-service upper upscale hotels. These hotels operate under the Hilton brand and utilize the Hilton System, which includes trademarks, a reservation service, marketing programs, training, and operational standards. Franchisees have the option to add an eforea spa or utilize specific Restaurant Brands within their hotel, each with its own set of guidelines and fees.
Corporate History
The guest lodging business roots of Hilton can be traced back to 1946 with Hilton Hotels Corporation (HHC). HHC later changed its name to Hilton Worldwide, Inc. (HWI) in 2009, and then to Park Hotels & Resorts Inc. in 2016 before becoming an independent company in 2017. Hilton Franchise Holding LLC, the current franchisor, was formed in September 2007 and began franchising hotels under the Hilton Brand in the U.S. on March 30, 2015. Predecessor entities, Hilton Franchise LLC and Hilton Inns, Inc., offered licenses for Hilton Brand hotels in the U.S. starting from September 1965.
Financial Overview
Investment Range
$49,685,442 - $204,323,235
Franchise Fee (High)
$150,000
Minimum Cash Required
$1,600,000
Royalty %
5%
Marketing %
4%
Equipment Costs (Low)
$43,669,883
Equipment Costs (High)
$182,389,251
Working Capital
$1,900,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Hilton Franchise Holding LLC has a strong financial position, reporting net income of $1,487,571 thousand in 2024, $1,372,281 thousand in 2023, and $1,233,442 thousand in 2022. The company's balance sheets show significant assets and member's equity, with total assets of $1,269,897 thousand and total liabilities of $692,892 thousand as of December 31, 2024. The independent auditor has issued an unqualified opinion on the financial statements and evaluated for any going concern issues, indicating no substantial doubt about the company's ability to continue operations. Additionally, the company makes substantial distributions of retained earnings to its affiliates, demonstrating consistent profitability. The company expects that ongoing litigation will not have a material adverse effect on its financial position, results of operations, or cash flows.
Financing Details
Hilton Franchise Holding LLC generally does not offer direct or indirect financing for franchisees. However, it does offer a development incentive program, which is a financial contribution to assist with hotel development or conversion. This incentive is not a loan, but a contingent liability that does not have to be repaid unless the franchise terminates before the end of its term or a transfer occurs without the transferee assuming the obligation. The repayable amount of the incentive decreases annually over the term of the franchise agreement and bears no interest unless it becomes due and unpaid. In rare circumstances, Hilton may offer other types of financing like mezzanine loans or guarantees, but the specific terms for these are not predetermined.
Performance Metrics
Total US Locations
187
Franchised Units
187
Corporate Units
0
Franchising Since
1965
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
11
Litigation Summary
Hilton Franchise Holding LLC has been involved in several legal disputes. Multiple class-action lawsuits were filed against Hilton Worldwide (its parent company) in 2024 and 2025, alleging antitrust violations related to hotel room pricing through revenue management software, such as IDeaS, Amadeus Hospitality, and CoStar/STR. These complaints claim that Hilton improperly shared information with competitors and used software to set higher room rates in extended-stay or luxury hotel markets. Additionally, Hilton Domestic Operating Company Inc. recently settled cases with the States of Texas (filed 2023, settled 2025) and Nebraska (filed 2019, settled 2024) concerning the disclosure of mandatory guest fees, agreeing to financial payments and improved fee transparency. Earlier litigation from 2020 and 2019 involved breach of contract and wrongful termination claims by former franchisees, which were both settled by 2022 and 2020 respectively. An older class action from 2013 regarding resort fee disclosures was settled in 2015. A 1970 antitrust civil complaint against Hilton Hotels Corporation was resolved with a final judgment in 1971.
Bankruptcy History
Hilton Franchise Holding LLC has no bankruptcy history to disclose.
Agreement Terms
Initial Term
23 years
Renewal Conditions
Hilton Franchise Holding LLC does not grant franchisees the right to renew or extend the franchise agreement. If the franchisor, in its sole discretion, agrees to re-license a hotel after the expiration of a prior franchise, the franchisee may be required to sign a new agreement with materially different terms and conditions and comply with any specified property improvement plan (PIP) performance conditions.
Training & Support Program
Franchisor Assistance
Hilton Franchise Holding LLC provides a range of support services to its franchisees. Before opening, the franchisor loans access to its Manual (Standards), reviews and approves the franchisee's chosen architect, interior designer, general contractor, and major subcontractors, as well as the hotel's plans and designs. It also reviews and approves the proposed hotel management, provides the HITS Agreement for computer systems, and makes purchase arrangements for exterior signs, operating equipment, and supplies. If applicable, the franchisor provides design and construction guidelines for eforea spas and menu templates for Restaurant Brands. Initial training programs are also specified and provided for the general manager and other key personnel. Once the hotel is operational, Hilton publishes a directory for System Hotels, provides access to its Reservation Service, administers a quality assurance program including inspections and guest satisfaction surveys, and offers suggestions for improving spa and restaurant/bar operations (if applicable). Optional services like Revenue Management Consolidated Center (RMCC) support, additional training, and recruitment assistance may also be offered.
Initial Training Hours
100
Training Location
Training programs are conducted through various formats including virtual (internet-based with live instructor) and online (internet-based without live instructor) classes. Brand conferences may be held at various hotel locations. Eforea spa training and the Hilton Orientation and New Employee Training Program are conducted on-site.
Ongoing Support
After a Hilton hotel opens, franchisees receive continuous support through various programs. The franchisor publishes a directory of all System Hotels and includes them in international, national, and regional marketing programs. Franchisees are granted access to the Reservation Service, provided they remain compliant with the agreement. Hilton administers a quality assurance program that includes periodic inspections, guest satisfaction surveys, and audits. For hotels with an eforea spa or a Restaurant Brand, the franchisor makes available team members who provide periodic suggestions for operational improvements. Additionally, the franchisor may offer optional services such as Revenue Management Consolidated Center (RMCC) support for revenue management analysis and strategy, and various optional training programs and miscellaneous services like recruitment assistance and system upgrades.
Franchise Requirements
Ideal Candidate Profile
Hilton Franchise Holding LLC seeks franchisees who can provide qualified and experienced management for the operation of their Hilton hotel. Candidates, or their proposed management company, must be experienced and qualified in managerial skills and operating capability, demonstrating the ability to adhere fully to the obligations and requirements of the Franchise Agreement. If the franchisee chooses to manage the hotel directly, they must obtain prior written approval from Hilton and successfully complete the required training program. When evaluating management, Hilton considers the organizational structure, prior experience, and performance in managing similar first-class, full-service hotels.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
supervisory
Territory Type
Non-Exclusive
Territory Size Requirements
Hilton Franchise Holding LLC grants a non-exclusive license to operate a Hilton hotel at a specified location. The standard Franchise Agreement does not grant franchisees a protected or exclusive territory. However, the franchisor may optionally agree to a 'Restricted Area Provision' for a defined period, which is shorter than the franchise term. The boundaries of this Restricted Area are determined on a case-by-case basis based on the immediate competitive market and may be delineated by cities, metropolitan areas, counties, streets, highways, or a specified radius from the hotel's front door. The franchisor explicitly states that boundaries will not be delineated by any standard formula, as they vary in size and shape.
Staffing Notes
Hilton Franchise Holding LLC requires franchisees to provide qualified and experienced management and staff for the operation of their Hilton hotel. The general manager and other key personnel are required to complete specified training programs to the franchisor's satisfaction before the hotel opens. All hotel staff must complete an orientation program within 30 days of the hotel's opening or conversion, and new hires must complete an orientation within 30 days of their start date. Key roles like directors of sales and sales managers are also required to complete specific sales skills training. While the franchisor provides training content relevant to operating the hotel in accordance with its standards, it does not directly supervise personnel or control the franchisee's employment policies or procedures. Franchisees are responsible for selecting their personnel and ensuring they meet training requirements.