Tapestry Collection By Hilton Franchise

Financing Details

Hilton Franchise Holding LLC generally does not offer direct financing to its franchisees, except for a development incentive program. This program provides a financial contribution to assist with hotel development or conversion, which is not a loan and does not require repayment unless the franchise agreement terminates early or is transferred without the new owner assuming the obligation. The repayable amount of this incentive decreases annually over the term of the Franchise Agreement and bears no interest unless payments are late. The incentive is disbursed within 30 days after the hotel opens, subject to certain conditions. Occasionally, the franchisor may allow the franchise application fee to be paid in installments for a limited time before construction, without charging interest or requiring a security interest. In rare and unique situations, the franchisor may also offer other types of financing, such as mezzanine loans or guarantees for franchisee obligations, with terms determined on a case-by-case basis based on the hotel's specific financial situation.

Litigation Summary

Hilton Franchise Holding LLC, operating as Tapestry Collection by Hilton, has been involved in several lawsuits. Currently, there are five pending class-action lawsuits filed between February 2024 and January 2025. These lawsuits primarily allege violations of the Sherman Act, claiming that Hilton Worldwide and other hotel defendants improperly shared information through revenue management software and exchanged competitive data to set higher room rates in various markets. In terms of concluded actions, Hilton Domestic Operating Company Inc. (a parent company) settled with the State of Texas in January 2025 and the State of Nebraska in February 2024 regarding how mandatory guest fees were disclosed to consumers. Without admitting fault, the company agreed to pay settlements and improve disclosure practices. Hilton Franchise Holding LLC also settled two breach of contract cases: one in June 2021 with a former Curio brand hotel franchisee involving a fraudulent inducement counterclaim, and another in September 2020 with a Hampton hotel franchisee concerning wrongful termination. An older antitrust civil complaint from 1970 against Hilton Hotels Corporation (a predecessor) was concluded in 1971 with a final judgment enjoining certain practices related to hotel suppliers. There are no collection suits against franchisees or former franchisees reported for 2024.

Renewal Conditions

Tapestry Collection by Hilton franchisees do not have an automatic right to renew or extend their franchise agreement. However, if Hilton Franchise Holding LLC decides to agree to re-license the hotel, it is at its sole discretion. In such cases, franchisees may be required to sign a new contract with terms and conditions that are materially different from their original agreement, and they must also comply with any property improvement plan (PIP) performance conditions specified by the franchisor.

Staffing Notes

Tapestry Collection by Hilton requires franchisees to provide qualified and experienced management for the operation of their hotel, which must be managed either by the franchisee directly or by an approved third-party management company. The franchisor only approves management deemed qualified, experienced, and capable of adhering to the Franchise Agreement and Brand Standards. If a franchisee chooses to manage the hotel directly, they need prior written approval and must successfully complete the franchisor's training program, unless a waiver is granted. If a franchisee is deemed unqualified, a professional hotel management company acceptable to the franchisor may be required for at least the first year of operations. Approved management companies must be authorized to fulfill all franchisee obligations, including indemnity and insurance. Key personnel, such as the general manager and director of sales, are required to attend specific training programs to meet Brand Standards. Should an approved management company resign, be terminated, or become unsuitable, the franchisee must retain a new acceptable management company within 90 days. Franchisees always retain sole responsibility for hotel management and operations, even when using a management company. The franchisor may communicate directly with hotel managers and management companies and rely on their communications. Franchisees and their management companies are prohibited from copying or disclosing confidential materials without consent. The franchisor will not approve any 'Competitor' (an entity owning, licensing, or franchising a competing hotel brand) or an entity acting as an exclusive manager for a Competitor to manage the hotel. If an approved management company becomes a Competitor, the franchisee has 90 days to secure a qualified substitute. Franchisees and their affiliates are also prohibited from allowing any Competitor to use their marks without prior written approval. The franchisor mandates specific training for personnel in key business and operational functions, including the general manager, commercial leaders, sales staff, and front office personnel, which must be completed to the franchisor's satisfaction. Replacement hires must also complete the appropriate training. Training content is designed to enable the hotel to operate in accordance with Brand Standards, but the franchisor does not supervise personnel or employment policies. The general manager and director of sales must attend an annual Brand or regional conference. New general managers and commercial leaders (or those returning after 24 months) must complete a virtual learning program within 90 days of their start date, with curriculum and costs varying by experience. All staff using the Hilton Property Management System (HPMS) must complete role-specific training before opening or within 10 days of employment. Front desk staff and management must have their HPMS training verified. Staff utilizing OnQ Rate & Inventory and Global Revenue Optimization (GRO) must complete web-based training and pass a certification test (minimum 80% score) before opening, with up to three management staff requiring certification. Hilton Honors training is mandatory for management and applicable front office personnel before opening or within 14 to 45 days of their start date, depending on the position. Designated commercial leaders and sales staff must complete a 'Hilton Core Sales Skills' certification program within 90 days of their start date, with tracks for different experience levels. Annual compliance training on topics such as diversity, harassment prevention, human trafficking prevention, disability awareness, and cybersecurity is required; some courses are free, while others may involve vendor fees. Pre-opening hospitality tools and resources are accessible for a fee. Owner orientation is mandatory for new Hilton Worldwide Brand franchisees or management company representatives 12-18 months prior to opening, or within 180 days of a Change of Ownership for transferees. Franchisees without prior hospitality experience are required to complete a 'New to Hospitality Owner Education' virtual program before opening or within 90 days of a Change of Ownership, provided by a third-party vendor for a fee. If an eforea spa is part of the hotel, the spa director, leadership team, administration, and technical staff (e.g., estheticians, therapists, hairdressers) must complete product and service training before the spa opens, provided by suppliers. All hotel staff must complete a Tapestry Orientation program within 30 days of the hotel's opening, or within 30 days of their start date for new hires, facilitated by designated hotel trainers.