LXR Hotels Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$5,364,048 - $845,773,369
Total US Locations
4
Business Summary
LXR Hotels & Resorts operates luxury hotels under a franchise agreement, allowing franchisees to use its proprietary system. This system includes access to the brand's trademarks, reservation services, advertising and marketing programs, training materials, and operational standards. Franchisees are expected to follow high standards for construction, furnishing, operation, appearance, and service to provide a distinctive luxury hotel experience.
Corporate History
Hilton Franchise Holding LLC was formed in September 2007. It began operating as the franchisor for the LXR Brand in the United States on September 14, 2018. Its guest lodging business history dates back to 1946 through its parent company, Hilton Domestic Operating Company Inc., and its predecessor entities, including Hilton Hotels Corporation. The ultimate parent company is Hilton Worldwide Holdings Inc.
Financial Overview
Investment Range
$5,364,048 - $845,773,369
Franchise Fee (High)
$150,000
Minimum Net Worth
$7,348,000
Royalty %
5%
Marketing %
4%
Equipment Costs (High)
$681,780,000
Working Capital
$2,050,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
The auditor's report for Hilton Franchise Holding LLC gives an unqualified opinion, indicating that its financial statements are presented fairly in all material respects. The company's assets and franchise contracts are pledged as collateral for Hilton's debt obligations, which mature between 2025 and 2033. Hilton Franchise Holding LLC maintains intercompany balances with its affiliates through Hilton's centralized cash management system, settling these amounts and distributing retained earnings to its parent company. In 2024, the company acquired franchise contract intangible assets, with the payment initially handled by an affiliate and subsequently settled as a short-term intercompany payable.
Financing Details
Hilton Franchise Holding LLC generally does not offer direct or indirect financing to its franchisees. However, it may provide a development incentive, which is a financial contribution that does not need to be repaid unless the franchise agreement ends early or is transferred. The amount that might need to be repaid is reduced each year over the term of the agreement. In rare and unique circumstances, Hilton Franchise Holding LLC might offer other types of financing, such as a mezzanine loan or a loan guarantee, but the specific terms for these would be decided individually at the time of origination.
Performance Metrics
Total US Locations
4
Franchised Units
4
Corporate Units
0
Franchising Since
2018
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
11
Litigation Summary
Hilton Franchise Holding LLC, the franchisor, has 11 disclosed litigation cases, many of which are recent and ongoing. Several current class action lawsuits, filed in 2024, allege antitrust violations related to improper sharing of information and setting room rates through revenue management software in various hotel markets. These include cases filed by Au, Gonzalez, Dai, Shattuck, Segal, and Portillo, targeting Hilton Worldwide and other hotel defendants. Additionally, AAAA Property Partners LLC filed a breach of contract suit in January 2025 against Hilton Franchise Holding LLC concerning a terminated franchise due to payment defaults. In settled actions, Hilton Domestic Operating Company Inc. faced lawsuits from the States of Texas (filed 2023) and Nebraska (filed 2019) regarding deceptive trade practices related to mandatory guest fees, both of which were settled in 2025 and 2024, respectively, with agreements to disclose fees more clearly. Hilton Franchise Holding LLC also settled a breach of contract suit with a former Curio brand franchisee in 2022, which involved counterclaims for fraudulent inducement. Another settled case from 2020 involved a wrongful termination claim by a Hampton hotel franchisee, which was dismissed. Two older cases, from 2013 and 1970, were also disclosed, involving class actions related to resort fees and antitrust allegations, respectively, both of which were settled or concluded long ago. There were no collection suits brought against franchisees in 2024.
Bankruptcy History
Hilton Franchise Holding LLC has no bankruptcy history to report.
Agreement Terms
Initial Term
23 years
Renewal Conditions
LXR Hotels & Resorts franchisees do not have the right to renew or extend their franchise agreement after its initial term expires.
Training & Support Program
Franchisor Assistance
Hilton Franchise Holding LLC provides a range of support services for LXR Hotels & Resorts franchisees. Before a hotel opens, the franchisor loans a copy of its confidential Manual containing brand standards, reviews and approves the selection of architects, interior designers, general contractors, and major subcontractors, and approves the proposed hotel management. It also provides the Information Technology System Agreement (HITS Agreement), makes available purchase/lease arrangements for exterior signs, operating equipment, and supplies, and specifies initial and ongoing mandatory and optional training programs. The franchisor's affiliate, Hilton, manages the brand license and system, markets new agreements, furnishes assistance, and implements quality assurance programs on behalf of the franchisor. During operation, Hilton Franchise Holding LLC publishes directories, provides access to its Reservation Service, and administers a quality assurance program through periodic inspections, guest satisfaction surveys, and audits. It also manages advertising campaigns and maintains various required computer systems for hotel operations.
Initial Training Hours
228
Training Location
Various locations, including virtual, online, and on-site at the franchisor's designated facilities or at the hotel.
Ongoing Support
After opening, LXR Hotels & Resorts provides ongoing support through various programs. This includes administering a quality assurance program with periodic inspections of the hotel, guest satisfaction surveys, and audits to ensure compliance with brand standards and renovation requirements. Hotels that consistently fall below minimum service quality standards may be required to participate in a Service Quality Improvement Program, which involves a service improvement plan, additional assessments, re-training, and coaching. The franchisor also publishes directories including System Hotels, provides continuous access to its Reservation Service, and includes hotels in international, national, and regional marketing programs. Other ongoing support includes computer system maintenance and support, and various optional and mandatory sales and distribution programs, as well as optional training programs.
Franchise Requirements
Ideal Candidate Profile
LXR Hotels & Resorts seeks franchisees who can provide qualified and experienced management for their hotel operations. The franchisor requires that either the franchisee or a third-party management company be approved, demonstrating they are capable of adhering to the franchise agreement obligations and standards. The franchisor may reject candidates or management companies deemed inexperienced or unqualified in managerial skills or operating capacity. This often includes prior experience and performance in managing similar first-class, luxury hotels.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
Yes
Operational Details
Location Type
commercial
Owner Participation
supervisory
Territory Type
non-exclusive
Territory Size Requirements
LXR Hotels & Resorts does not define a standard territory size. Boundaries for any specific territorial restrictions, if granted, vary in size and shape from hotel to hotel. These boundaries are not based on a standard formula but may be delineated using references to cities, metropolitan areas, counties, other political subdivisions, streets or highways, or a specified radius around the front door of the hotel.
Staffing Notes
LXR Hotels & Resorts requires the hotel to have qualified and experienced management, either directly from the franchisee or through an approved third-party management company. The general manager, director of sales, and other key personnel must complete mandatory training programs. Additionally, each hotel must ensure it has at least two certified facilitators/trainers who are responsible for providing ongoing brand learning programs to all staff within the hotel.