Tempo By Hilton Franchise

Financial Health Notes

Tempo by Hilton operates as a financially healthy entity within the larger Hilton corporate structure. Its financial statements have received an unqualified audit opinion, indicating fair presentation. The company generates substantial net income, for instance, $1.48 billion in 2024, with much of this being distributed to its parent company. Tempo by Hilton's assets and franchise contracts are pledged as collateral for some of Hilton's overall debt obligations, which mature between 2025 and 2033; however, auditors anticipate no material adverse effect on its financial position. The company's cash management is centralized through Hilton affiliates, with amounts due from affiliates related to franchise deposits held as assets. While Tempo by Hilton is involved in various lawsuits, it expects the resolution of these matters will not materially impact its financial health. There are no going concern qualifications noted by its auditors.

Ongoing Support

After opening, Tempo by Hilton provides ongoing support to its franchisees by regularly publishing a directory that includes System Hotels and incorporating them into national and regional advertising and marketing programs. Franchisees maintain access to the Reservation Service and participate in a quality assurance program that involves periodic hotel inspections, guest satisfaction surveys, and audits to ensure compliance with brand standards and renovation requirements. For hotels with a Restaurant Brand, there are additional inspections and team member consultations for operational improvements. The franchisor also offers an optional Revenue Management Consolidated Center (RMCC) for revenue analysis, strategy, and coaching, which may become mandatory if performance guidelines are not met. Additionally, Tempo by Hilton manages technology maintenance and updates for required computer systems, provides email services, and supports the Connected Room system.

Territory Size Requirements

Tempo by Hilton generally grants franchisees a non-exclusive license to operate their hotel at a specified location, meaning there is no standard protected area or territory. Franchisees may face competition from other Tempo by Hilton franchisees, hotels owned by Hilton affiliates, or other distribution channels and competitive brands controlled by Hilton. The franchisor and its affiliates retain the right to own, operate, manage, franchise, license, lease, acquire, create, establish, or serve as a franchisee or licensee for competitive guest lodging facilities or networks anywhere, including within the franchisee's immediate area, under any brands or marks (excluding the Tempo by Hilton brand within a granted Restricted Area, if any). However, the franchisor may agree to provide certain specific territorial restrictions, referred to as a "Restricted Area Provision," for an area surrounding the franchised hotel. If granted, the boundaries of this Restricted Area are determined on a case-by-case basis based on the immediate competitive market, rather than a standard formula. The Restricted Area may be defined by cities, metropolitan areas, counties, streets, highways, or a specified radius from the hotel's front door. Any Restricted Area Provision would typically be for an agreed-upon time period, shorter than the full term of the Franchise Agreement, and would not apply to any optional Restaurant Brand restaurants or bars operated within the hotel. These Restricted Area Provisions also generally do not apply to existing or approved Tempo by Hilton hotels, hotels under other brands, hotels opening after the Restrictive Period, gaming-oriented facilities, shared ownership properties, or chains of four or more hotels acquired by Hilton or its affiliates. The continuation of a Restricted Area is not tied to the franchisee achieving specific sales volumes or market penetration.