Home2 Suites Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$15,686,198 - $24,442,399
Total US Locations
663
Business Summary
Home2 Suites by Hilton operates high-quality hotels featuring suites at mid-market prices, primarily targeting extended-stay travelers who stay five or more consecutive nights. The hotels offer flexible, homelike suites with kitchen facilities and public spaces designed to foster a sense of community, including fitness rooms, indoor swimming pools, and outdoor recreational areas. While Home2 Suites by Hilton locations do not offer full restaurant service, they do provide a complimentary breakfast for all guests, focusing on eco-sustainability and value-level pricing.
Corporate History
Hilton Franchise Holding LLC, the franchisor for Home2 Suites by Hilton, was formed in September 2007 and has been offering Home2 Suites by Hilton franchises in the U.S. since March 30, 2015. Its predecessor, HLT ESP Franchise LLC, offered franchises for the brand from January 2009 through March 2015. The ultimate parent company, Hilton Worldwide Holdings Inc., was formed in March 2010, and its broader guest lodging business lineage, including Hilton and Park Hotels & Resorts, Inc. (formerly Hilton Hotels Corporation), dates back to 1946, establishing a long history in the hospitality industry.
Financial Overview
Investment Range
$15,686,198 - $24,442,399
Franchise Fee (High)
$200,000
Royalty %
6%
Marketing %
3.5%
Equipment Costs (Low)
$12,900,000
Equipment Costs (High)
$19,700,000
Working Capital
$500,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Home2 Suites by Hilton, operating as Hilton Franchise Holding LLC, appears to be in a strong financial position, evidenced by its audited financial statements, which received an unqualified opinion. The company reported substantial net income and maintains a healthy current ratio, indicating ample liquid assets to cover short-term liabilities. While its assets and franchise contracts are pledged as collateral for its parent, Hilton Worldwide Holdings Inc.'s, debt obligations, this is a common structure for large corporate groups. The company also manages intercompany payables and receivables related to a centralized cash management system and recently acquired brand assets, demonstrating a complex but well-managed financial operation without any going concern qualifications.
Financing Details
Home2 Suites by Hilton, through its franchisor Hilton Franchise Holding LLC, generally does not offer direct financing to franchisees, with a primary exception for development incentive programs. These incentives are financial contributions to help with new hotel development or conversion, which do not require repayment unless the franchise terminates early or a transfer occurs. The repayable amount of the incentive decreases annually over the franchise term. Occasionally, the franchisor may allow the initial franchise application fee to be paid in installments without interest, though the full balance becomes due immediately upon default. In rare and unique circumstances, the franchisor may also offer other types of financing, such as mezzanine loans or loan guarantees, with terms determined on a case-by-case basis. If a development incentive becomes repayable, an annual interest rate of 1.5% per month or the highest legal rate applies to overdue amounts.
Performance Metrics
Total US Locations
663
Franchised Units
663
Corporate Units
0
Franchising Since
2009
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
11
Litigation Summary
Home2 Suites by Hilton, as Hilton Franchise Holding LLC and its affiliates, has been involved in several litigation cases. Currently, there are five pending class-action lawsuits filed in 2024 against Hilton Worldwide and other hotel defendants. These suits allege violations of the Sherman Act, claiming improper sharing of information through revenue management software and competitive data exchanges that led to higher room rates in extended stay and luxury hotel markets. Additionally, Hilton Domestic Operating Company Inc. recently settled two cases filed in 2023 and 2019 by the States of Texas and Nebraska, respectively, regarding the disclosure of mandatory guest fees; Hilton agreed to pay settlements and improve fee transparency without admitting fault. In 2020, Hilton Franchise Holding LLC filed a breach of contract suit against a former franchisee for early termination, which was settled in 2022. Earlier cases from 2019, 2013, and 1970 have been concluded, some involving wrongful termination allegations or antitrust claims from decades past. No collection suits were brought against franchisees in 2024.
Bankruptcy History
Home2 Suites by Hilton, as Hilton Franchise Holding LLC, has no bankruptcy history to report.
Agreement Terms
Initial Term
22 years
Renewal Conditions
Home2 Suites by Hilton franchisees do not have the right to renew or extend their franchise agreement. However, if the franchisor, in its sole discretion, agrees to re-license the hotel, the franchisee may be required to sign a new contract with potentially different terms and conditions. Any re-licensing would also necessitate compliance with specific property improvement plan (PIP) performance conditions set by the franchisor.
Training & Support Program
Franchisor Assistance
Home2 Suites by Hilton offers comprehensive assistance to its franchisees. Before opening, the franchisor provides access to its Manual of Standards, reviews and approves choices for architects, interior designers, general contractors, and major subcontractors. It also reviews and approves hotel plans, layouts, and designs, and evaluates proposed management. Franchisees receive the HITS Agreement for access to proprietary computer systems like OnQ and Guest Internet Access, and guidance on purchasing initial equipment and supplies. The franchisor specifies required and optional training programs for key personnel. During operations, Home2 Suites by Hilton periodically publishes directories of System Hotels and includes them in national and regional marketing programs. It provides access to its Reservation Service and administers a quality assurance program through inspections and guest satisfaction surveys, which may include a Service Quality Improvement Program for underperforming hotels. Optional consultation services are also available for a fee. The franchisor ensures ongoing hardware and software maintenance and support for required computer systems like OnQ, Guest Internet Access, Connected Room, GRO, and Delphi. Extensive training programs are available covering various aspects from general management and sales to specific systems like HPMS and Hilton Honors.
Initial Training Hours
130
Training Location
Various locations
Ongoing Support
After opening, Home2 Suites by Hilton provides ongoing support to franchisees, including periodically publishing directories and including hotels in international, national, and regional marketing programs. The franchisor offers access to its Reservation Service and administers a quality assurance program through periodic inspections, guest satisfaction surveys, and audits. This includes a Service Quality Improvement Program for hotels that consistently fail to meet minimum service quality standards, which involves a service improvement plan, additional assessments, re-training, consulting, and coaching. Ongoing hardware and software maintenance and support are provided for required computer systems like OnQ, Guest Internet Access, Connected Room, GRO, and Delphi. Franchisees are required to attend an annual Brand or regional conference and complete annual compliance training. Optional consultation services are also available for a fee.
Franchise Requirements
Ideal Candidate Profile
Home2 Suites by Hilton seeks franchisees who can provide qualified and experienced management for their hotel operations. Ideal candidates, or their proposed management companies, must demonstrate managerial skills and operating capability to successfully adhere to the franchise agreement's obligations and requirements. The franchisor evaluates a candidate's prior experience and performance in managing similar first-class, focused-service hotels, among other relevant factors. If a franchisee is not qualified to operate the hotel directly, they may be required to retain an approved professional hotel management company.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Commercial
Owner Participation
Absentee Allowed
Territory Type
Non-Exclusive
Staffing Notes
Home2 Suites by Hilton requires hotels to have qualified and experienced management and personnel in key functions. The general manager and other commercial leaders must complete specific virtual training programs within 90 days of their start date, especially if they are new to the role or the brand. All staff utilizing the Hilton Property Management System (HPMS) and those involved in reservations and revenue management must complete designated training and certification before the hotel's opening. Management personnel and front office staff are also required to complete Hilton Honors training. Designated commercial leaders and sales staff must complete the Hilton Core Sales Skills certification. A manager (general manager, assistant general manager, director of sales, sales manager, or revenue manager) must complete Revenue Management @ Work training. Additionally, the general manager and director of sales (or equivalent) must complete Extended-Stay Sales Training.