Project Alpha by Hilton Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$18,597,504 - $90,685,425
Franchise Fee
$100,000
Min Cash Required
$900,000
Business Summary
Project Alpha by Hilton operates hotels under a franchise agreement, providing guest lodging services. It is part of the larger Hilton enterprise, which has a long history in the guest lodging business.
Corporate History
Hilton Franchise Holding LLC was formed as a Delaware limited liability company in September 2007. Its parent company, Hilton Domestic Operating Company Inc., was formed in 2016, and its ultimate parent, Hilton Worldwide Holdings Inc., was formed in 2010. The broader Hilton enterprise, including its predecessors, has conducted a guest lodging business since 1946. Hilton Franchise Holding LLC officially became the franchisor for the Project Alpha by Hilton brand on February 9, 2024.
Financial Overview
Investment Range
$18,597,504 - $90,685,425
Franchise Fee (Low)
$100,000
Franchise Fee (High)
$150,000
Minimum Cash Required
$900,000
Minimum Net Worth
$6,165,500
Royalty %
5%
Marketing %
4%
Equipment Costs (Low)
$15,593,775
Equipment Costs (High)
$79,336,715
Working Capital
$1,100,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Project Alpha by Hilton, as part of Hilton Franchise Holding LLC, appears to be in strong financial health. Its financial statements reflect significant revenues and net income, with an unqualified audit opinion from independent auditors. The company is involved in a centralized cash management system with its parent company, Hilton Domestic Operating Company Inc., and has substantial intercompany transactions including the settlement of billions in receivables and distribution of retained earnings to its parent. Project Alpha by Hilton's assets and franchise contracts are pledged as collateral for some of Hilton's debt obligations, indicating its integration within the larger, well-established Hilton corporate financial structure.
Financing Details
Project Alpha by Hilton generally does not offer direct financing to franchisees, except for a discretionary development incentive program. This incentive is a financial contribution to help with hotel development or conversion, and it typically does not need to be repaid unless the franchise agreement ends early or the hotel is transferred. The repayable amount of this incentive decreases over time. If the incentive does become repayable and is not paid on time, it accrues interest at 1.5% per month or the maximum legal rate. While Project Alpha by Hilton may, in rare and unique cases, offer other types of financing like mezzanine loans or loan guarantees, the specific terms for such arrangements are not predetermined and would depend on individual circumstances.
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
9
Litigation Summary
Project Alpha by Hilton, through its affiliates, has been involved in several litigations. Currently, there are three pending cases: two concerning alleged deceptive trade practices related to guest fees (Texas and Destin Platinum, filed in 2023), and one where Project Alpha by Hilton is enforcing a court judgment against a former Embassy Suites franchisee for breach of contract and trademark infringement (filed in 2019, judgment in 2021). Recently concluded cases include a settlement in 2024 with Nebraska over guest fee disclosures, resulting in a $300,000 payment, and a 2022 settlement with a former Curio franchisee over breach of contract and alleged fraudulent inducement.
Bankruptcy History
Project Alpha by Hilton has no bankruptcy history to report for the franchisor or its key personnel.
Agreement Terms
Initial Term
23 years
Renewal Conditions
Project Alpha by Hilton franchisees do not have the right to renew or extend their franchise agreement. However, if Project Alpha by Hilton decides, at its sole discretion, to re-license the hotel, the franchisee may be required to sign a new contract with terms and conditions that are materially different from the original agreement. Additionally, the franchisee must comply with any Property Improvement Plan (PIP) performance conditions specified by Project Alpha by Hilton.
Training & Support Program
Franchisor Assistance
Project Alpha by Hilton provides comprehensive support to its franchisees both before and after opening. Before a hotel opens, Project Alpha by Hilton loans or provides electronic access to its Manual of standards, reviews and approves architects, interior designers, general contractors, and major subcontractors, and approves hotel construction or renovation plans. It also approves the proposed management company and provides the Information Technology System Agreement (HITS Agreement) for essential computer systems. During this phase, Project Alpha by Hilton also makes arrangements available for exterior signs, operating equipment, and furnishings, and specifies required and optional training programs. Once operational, Project Alpha by Hilton continues to support franchisees by publishing directories and including hotels in national, regional, and international marketing programs. It furnishes access to its Reservation Service, administers a quality assurance program with periodic inspections and guest satisfaction surveys, and offers optional consultation services for operations, facilities, and marketing. For computer systems, Project Alpha by Hilton mandates several critical systems, including the proprietary OnQ system for reservations and property management, the StayConnected Guest Internet Access System, the Connected Room system for in-room controls, the Global Revenue Optimization (GRO) system for pricing recommendations, a Digital Floor Plan for guest room selection, and the Digital Key system for mobile room access, as well as the Delphi Sales and Events system. Training is extensive, with mandatory courses for general managers and key staff covering various operational and system-specific topics like OnQ, Hilton Honors, sales skills, and compliance. Project Alpha by Hilton also manages all advertising and promotional programs, controlling creative concepts, media placement, and the allocation of funds from the Monthly Program Fee to benefit the entire System. It also manages all online presence, including domain names and websites, ensuring brand consistency.
Initial Training Hours
32
Training Location
Training is provided through a variety of formats including virtual, online, and on-site sessions. The annual Brand Conference location varies, while some specific pre-opening training resources and the Project Alpha Orientation are conducted on-site. Other key management and system-specific trainings are primarily virtual or online.
Ongoing Support
Project Alpha by Hilton provides ongoing support by regularly publishing a directory of System Hotels and including them in national, regional, and international marketing programs. Franchisees have continuous access to the Reservation Service. Project Alpha by Hilton also administers a quality assurance program through periodic inspections, guest satisfaction surveys, and audits to ensure compliance with brand standards. Optional consultation services are available for operations, facilities, and marketing, for which fees may apply. Additionally, Project Alpha by Hilton offers a Revenue Management Consolidated Center (RMCC) with various monthly support models for revenue management analysis, strategy, lead management, and coaching, which can be optional or required under specific circumstances.
Franchise Requirements
Ideal Candidate Profile
The FDD for Project Alpha by Hilton emphasizes that the ideal candidate or their chosen management company must be qualified and experienced in managing hotels. Project Alpha by Hilton requires prior written approval for both direct owner-management and third-party management companies. Management candidates must demonstrate managerial skills and operational capability and be able to fully adhere to the Franchise Agreement's obligations. If the owner manages directly, they must also successfully complete Project Alpha by Hilton's training program, unless waived. The franchise will not approve any competitor or an entity exclusively managing a competitor to operate a Project Alpha by Hilton hotel.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Commercial
Owner Participation
Supervisory
Territory Type
Non-Exclusive
Territory Size Requirements
Project Alpha by Hilton does not have a standard territory size. If a Restricted Area Provision is granted (which is not standard and is discretionary), its boundaries are determined based on the immediate competitive market, varying in size and shape for each hotel. These boundaries may be defined using cities, metropolitan areas, counties, streets, highways, or a specific radius from the hotel.
Staffing Notes
Project Alpha by Hilton requires franchisees to provide qualified and experienced management for their hotel, which can be the franchisee directly (with prior written approval and training completion) or an approved third-party management company. The franchisee is solely responsible for hotel management and operations, and engagement of a management company does not reduce these obligations. Project Alpha by Hilton mandates that key personnel, including the general manager, commercial leaders, and sales managers, complete specific training programs within 90 days of their start date. All hotel employees must also complete a new employee orientation program within 30 days of opening or their start date. The franchisor also specifies that hotel staff utilizing proprietary software must complete applicable training modules before implementation or within ten days of employment.