Homewood Suites Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$20,824,955 - $32,522,797
Min Cash Required
$600,000
Total US Locations
518
Business Summary
Homewood Suites by Hilton operates high-quality hotels offering suites at moderate prices. These hotels are designed for extended-stay travelers, featuring studio and two-room suites with separate kitchens and living rooms. They also provide amenities such as a pool, exercise center, limited meeting facilities, a convenience store, and a business center, all within a residential-like setting. While full restaurant service is not offered, complimentary breakfast and an "Evening Manager's Reception" are provided to guests.
Financial Overview
Investment Range
$20,824,955 - $32,522,797
Franchise Fee (High)
$200,000
Minimum Cash Required
$600,000
Royalty %
5.5%
Marketing %
3.5%
Equipment Costs (Low)
$17,227,955
Equipment Costs (High)
$27,457,850
Working Capital
$800,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Hilton Franchise Holding LLC, the franchisor for Homewood Suites by Hilton, appears to be in strong financial health. As of December 31, 2024, the company reported total assets of $1.27 billion and total liabilities of $692.9 million, resulting in member's equity of $577 million. The net income for 2024 was nearly $1.49 billion. The independent auditor has issued an unqualified opinion on the financial statements, indicating no substantial doubt about the company's ability to continue as a going concern. The company's assets and franchise contracts are pledged as collateral for certain debt obligations of its parent company, Hilton, which is a common corporate structure. Hilton Franchise Holding LLC also participates in a centralized cash management system with its affiliates, with significant intercompany balances settled annually, including distributions of retained earnings to its parent.
Financing Details
Homewood Suites by Hilton's franchisor primarily offers a development incentive program for new hotels, rather than direct financing. This incentive is a financial contribution to help with hotel development or conversion, and it does not need to be repaid unless the franchise terminates early or transfers. The amount of the incentive is disbursed after the hotel opens and certain conditions, like completing a property improvement plan and paying the franchise application fee, are met. The repayable amount of the incentive decreases over the term of the franchise agreement. Occasionally, the franchisor may allow the initial franchise application fee to be paid in installments without interest. In rare cases, the franchisor may also consider offering other types of financing, such as mezzanine loans or loan guarantees, but the specific terms for these would be determined individually.
Performance Metrics
Total US Locations
518
Franchised Units
518
Corporate Units
0
Franchising Since
1988
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
11
Litigation Summary
Homewood Suites by Hilton's franchisor, Hilton Franchise Holding LLC, and its affiliates face a number of lawsuits. Five class-action lawsuits are currently pending, filed between February 2024 and January 2025, which allege antitrust violations related to improper sharing of information and setting of room rates through third-party revenue management software. These cases name Hilton Worldwide or Hilton Domestic Operating Company Inc. as defendants, and the company intends to vigorously defend its interests. Additionally, Hilton Domestic Operating Company Inc. recently settled two cases with the States of Texas (filed May 2023) and Nebraska (filed July 2019) in January and February 2024, respectively. These settlements, totaling $2.1 million and $300,000, addressed allegations of deceptive trade practices concerning the disclosure of mandatory guest fees. Hilton also resolved a breach of contract and fraudulent inducement dispute with a former Curio brand franchisee (filed September 2020, settled July 2022) and a wrongful termination claim from a Hampton hotel franchisee (filed July 2019, settled September 2020), both concluding with dismissal of claims and mutual releases. Two older cases involving predecessors from 2013-2015 and 1970-1971 are also disclosed.
Bankruptcy History
Homewood Suites by Hilton's franchisor, Hilton Franchise Holding LLC, has no bankruptcy history to report.
Agreement Terms
Initial Term
22 years
Renewal Conditions
Homewood Suites by Hilton franchisees do not have an automatic right to renew or extend their franchise agreement. If the franchisor, at its sole discretion, agrees to re-license the hotel, the franchisee would be required to sign a new contract with potentially different terms and conditions and must comply with any specified Property Improvement Plan (PIP) performance conditions.
Training & Support Program
Franchisor Assistance
Homewood Suites by Hilton provides extensive support throughout the franchise lifecycle. Before opening, the franchisor loans its detailed Manual and reviews and approves architects, designers, contractors, building plans, and proposed management. It also provides the Information Technology System Agreement (HITS Agreement) for essential computer systems and makes arrangements for purchasing signs, equipment, and supplies. Required and optional training programs are specified for general managers and key personnel covering various operational functions, including management, sales, IT systems (OnQ, GRO, Delphi, Connected Room), and brand hospitality. During operation, Homewood Suites by Hilton publishes hotel directories, includes hotels in national and regional marketing, and provides access to its global Reservation Service. The franchisor administers a quality assurance program with periodic inspections, guest satisfaction surveys, and service quality improvement programs. It also provides ongoing computer system maintenance and requires periodic refreshes. Hilton also offers optional learning programs, participates in Strategic Partnerships, and centrally manages a Monthly Program Fee to fund various system-wide benefits like advertising, reservation system support, and technology programs.
Initial Training Hours
54
Training Location
Virtual/Online and various on-site locations
Ongoing Support
Homewood Suites by Hilton provides its franchisees with comprehensive ongoing support. This includes regularly publishing directories featuring the hotel, incorporating the hotel into national and regional advertising campaigns, and ensuring access to the central Reservation Service. The franchisor maintains a robust quality assurance program through periodic inspections, guest satisfaction surveys, and Stay Score assessments. For hotels that fall below minimum service standards, there's a Service Quality Improvement Program involving improvement plans, additional training, and coaching. The franchisor also manages a system-wide Monthly Program Fee which funds collective advertising, promotion, public relations, market research, and the development and maintenance of reservation and technology systems. Additionally, it offers continuous maintenance and refresh cycles for required computer systems like OnQ, Guest Internet Access, Connected Room, and Delphi, along with associated connectivity and email services.
Franchise Requirements
Ideal Candidate Profile
Homewood Suites by Hilton seeks franchisees who can provide qualified and experienced management for their hotel operations. The franchisor looks for individuals or management companies with strong managerial skills, operational capability, and the ability to fully adhere to the franchise agreement and brand standards. Franchisees who wish to manage their hotel directly must receive prior written approval and successfully complete the franchisor's training program.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
Yes
Technical Skills Required
Yes
Operational Details
Location Type
Retail
Owner Participation
Supervisory
Territory Type
Non-Exclusive
Territory Size Requirements
Homewood Suites by Hilton typically does not grant an exclusive territory as part of its standard franchise agreement. However, the franchisor may agree to provide a specific Restricted Area Provision around the hotel. The size and shape of this restricted area vary based on the local market and competitive conditions, and its boundaries are not determined by a standard formula. Instead, they can be defined by geographical references like cities, metropolitan areas, counties, or specific streets and highways, or as a radius of a certain distance from the front door of the hotel. This restricted area provision comes with several exclusions and usually applies for a shorter "Restrictive Period" than the full franchise term.
Staffing Notes
Homewood Suites by Hilton franchisees must provide qualified and experienced management for their hotel, which can be either the franchisee directly or an approved third-party management company. The franchisor approves management based on their experience and ability to adhere to the franchise agreement and standards. If the franchisee manages directly, they need prior written approval and must successfully complete the franchisor's training. If a management company is hired, they must have the authority to fulfill all franchisee obligations, and their general manager and other key personnel, such as the director of sales, must complete required training programs to meet brand standards, sometimes within specific timeframes like 90 days of their start date or before the hotel opens. Some training requires achieving a minimum score on a certification test. The franchisor reserves the right to require a professional hotel management company if the franchisee is deemed unqualified.