LivSmart Studios by Hilton Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$15,424,593 - $21,497,662
Business Summary
LivSmart Studios by Hilton operates midscale extended-stay hotels in the United States, providing high-quality lodging services to business travelers, families, vacationers, and guests requiring extended stays. The brand aims to offer a distinctive and consistent hotel experience under the LivSmart Studios by Hilton trademark.
Corporate History
Hilton Franchise Holding LLC was formed in September 2007. It operates as a wholly-owned subsidiary of Hilton Domestic Operating Company Inc., which was established in July 2016, and its ultimate parent is Hilton Worldwide Holdings Inc., formed in March 2010. The broader Hilton enterprise, through its predecessors like Hilton Hotels Corporation (later Park Hotels & Resorts Inc.), has been involved in the guest lodging business since 1946. Hilton Franchise Holding LLC officially became the franchisor for the LivSmart Studios by Hilton brand in the US on January 9, 2024. This brand was initially launched under the temporary name 'Project H3 by Hilton' in May 2023, with franchise agreements signed under that name later converting to LivSmart Studios by Hilton.
Financial Overview
Investment Range
$15,424,593 - $21,497,662
Franchise Fee (High)
$100,000
Minimum Net Worth
$7,348,000
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$1,651,093
Equipment Costs (High)
$2,295,075
Working Capital
$600,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Hilton Franchise Holding LLC's financial statements show an unqualified audit opinion, indicating fair presentation of its financial position. The company has strong net cash provided by operating activities, with $1.5 billion in 2024 and $1.4 billion in 2023. However, it operates as a subsidiary within the larger Hilton corporate structure, involving significant intercompany balances and large distributions of retained earnings to its Hilton affiliates ($1.5 billion in 2024 and $1.4 billion in 2023). A notable financial commitment is the unconditional and irrevocable guarantee of certain Hilton debt obligations by Hilton Franchise Holding LLC. The company's cash balance saw a significant decrease from $5.3 million in 2023 to $317,000 in 2024, influenced by these intercompany transactions and distributions.
Financing Details
LivSmart Studios by Hilton generally does not offer direct or indirect financing to its franchisees, except for a development incentive program. This incentive is a financial contribution that does not need to be repaid unless the franchise agreement terminates early or the hotel is transferred without the transferee assuming the obligation. The repayable amount of the incentive decreases annually over the term of the franchise agreement. The incentive is disbursed within 30 days of the hotel's opening, provided certain conditions are met, such as no material adverse changes in business or finances, completion of any required property improvement plan (PIP), and payment of the franchise application fee. Although the franchisor may, in rare circumstances, offer other types of financing like mezzanine loans or loan guarantees, the specific terms would be determined on a case-by-case basis. They occasionally allow franchise application fees to be paid in installments without interest or security interest over a limited period.
Performance Metrics
Total US Locations
0
Franchised Units
0
Corporate Units
0
Franchising Since
2024
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
11
Litigation Summary
LivSmart Studios by Hilton, through its parent company Hilton Worldwide, is currently involved in several pending class-action lawsuits filed in 2024. These cases allege violations of the Sherman Act, claiming that the hotel defendants improperly shared information and used revenue management software to set room rates in extended-stay and other hotel markets across the United States. Additionally, Hilton Domestic Operating Company Inc. (a parent company) settled two state lawsuits in 2024 and 2025 with Texas and Nebraska, respectively. These concluded actions involved allegations of deceptive trade practices related to how mandatory guest fees were disclosed to consumers. The settlements included monetary payments and agreements to enhance fee transparency. Other older cases, such as a 2020 breach of contract suit with a former franchisee and a 2019 wrongful termination claim, were settled or resolved before the last three years. LivSmart Studios by Hilton has no collection suits reported against franchisees in 2024.
Bankruptcy History
LivSmart Studios by Hilton, as the franchisor, has no bankruptcy history that needs to be disclosed. Item 4 of the FDD states, 'No bankruptcy is required to be disclosed in this Item.'
Agreement Terms
Initial Term
22 years
Renewal Conditions
LivSmart Studios by Hilton does not offer franchisees a right to renew or extend the franchise agreement. However, at its sole discretion, the franchisor may agree to re-license the hotel. In such cases, 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
LivSmart Studios by Hilton provides comprehensive support to its franchisees, beginning with the pre-opening phase. This includes access to the brand's Manual and electronic resources, review and approval of architects, designers, contractors, and hotel plans, and approval of the proposed management. Franchisees are also provided with the Information Technology System Agreement (HITS Agreement) for proprietary computer systems like OnQ, and access to purchase arrangements for exterior signs, operating equipment, and furnishings. The franchisor specifies initial and ongoing training programs for key personnel. During the operational phase, LivSmart Studios by Hilton publishes a directory of System Hotels and includes the franchisee's hotel in international, national, and regional marketing programs. Franchisees receive access to the Reservation Service and benefit from a quality assurance program that involves periodic inspections and guest satisfaction surveys. The brand mandates the use of various computer systems, including OnQ for reservations and property management, Guest Internet Access, the Global Revenue Optimization (GRO) system, Connected Room system, Digital Floor Plan, Digital Key system, Digital Payment system, and the Hilton Opening Transition Tool. Training programs are extensive and include virtual and online courses, as well as some on-site components. These cover areas such as General Manager and Sales Leader training, Hilton Property Management System (HPMS) usage, OnQ Rate & Inventory, Hilton Honors program, Hilton Core Sales Skills, ADA compliance, and annual compliance topics. Owner Orientation and New to Hospitality Owner Education are also provided. The franchisor manages a Service Quality Improvement Program for hotels that fall below minimum standards.
Initial Training Hours
90
Training Location
Initial training is primarily conducted virtually and online, with some on-site components depending on the specific program. For example, General Manager, Commercial and Sales Leader training, Hilton Core Sales Skills, Owner Orientation, and New to Hospitality Owner Education are virtual. HPMS, OnQ Rate & Inventory and GRO, Hilton Honors, ADA, Annual Compliance, Industry Education, and RISE Support training are online. Pre-Opening Training Resources and some Brand Learning Programs may include on-site elements. The annual Brand Conference location varies.
Ongoing Support
After opening, LivSmart Studios by Hilton franchisees receive ongoing support through several channels. This includes continuous access to the Reservation Service, inclusion in the brand's directory for travelers, and participation in international, national, and regional marketing programs. The franchisor administers a quality assurance program with periodic inspections, guest satisfaction surveys, and audits. Hotels that consistently fall below service quality standards may be required to participate in a Service Quality Improvement Program, which involves developing an improvement plan, additional training, and consulting. The franchisor also offers optional consultation services and advice in areas like operations, facilities, and marketing for a fee. Franchisees are required to regularly update and upgrade their OnQ and Guest Internet Access systems every 3-4 years, respectively, to maintain compliance with current standards.
Franchise Requirements
Ideal Candidate Profile
LivSmart Studios by Hilton seeks franchisees or management companies with qualified and experienced management capable of adhering to the Franchise Agreement and Standards. Franchisees must demonstrate financial capacity and have either direct experience in hotel management or be willing to hire an approved management company. The ideal candidate should not be a competitor who owns, licenses, or franchises a competing brand. They should also independently investigate market conditions and risks.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Hands-On
Territory Type
Non-Exclusive
Staffing Notes
LivSmart Studios by Hilton requires qualified and experienced management for the hotel's operation. The franchisee, or an approved third-party management company, must operate the hotel. Key personnel, including the general manager, commercial leaders, and sales leaders, must complete mandatory virtual learning programs within 90 days of their start date. All hotel staff using the Hilton Property Management System (HPMS) must complete role-specific training before the hotel opens. The training content is tailored to business and operational functions to ensure compliance with brand standards. The franchisor does not, however, dictate or control the franchisee's personnel policies or procedures.