Tru by Hilton Franchise

Financing Details

Hilton Franchise Holding LLC generally does not offer direct or indirect financing to Tru by Hilton franchisees, except through a development incentive program. This program provides a financial contribution, called an "Incentive," to assist with the development or conversion of a hotel. Franchisees must sign a development incentive note. The Incentive is disbursed within 30 days of the hotel's opening, provided that there have been no material adverse changes in the franchisee's business or finances, and all required property improvement plans and application fees have been completed and paid. The repayable amount of this Incentive gradually decreases each year over the term of the franchise agreement. If the franchise agreement terminates early or ownership is transferred (and the new owner doesn't assume the obligation), the outstanding Incentive balance becomes immediately due and accrues interest at 1.5% per month if not paid. The franchisor may offset any amounts owed to it against the Incentive disbursement. In unique and rare circumstances, the franchisor may consider offering other types of financing, such as mezzanine loans or guarantees for notes or leases, with terms determined on a case-by-case basis.

Litigation Summary

Hilton Franchise Holding LLC is involved in several pending class-action lawsuits and has recently concluded others. Five active lawsuits, all filed in 2024, allege violations of the Sherman Act, primarily related to improper information sharing and rate-setting practices through third-party revenue management software and competitive data exchange. These cases name Hilton Worldwide and Hilton Domestic Operating Company, Inc. as defendants and involve extended stay and luxury hotel markets. Additionally, Hilton Franchise Holding LLC recently settled two cases concerning the disclosure of mandatory guest fees, paying $2.1 million to the State of Texas in January 2025 and $300,000 to the State of Nebraska in February 2024. In July 2022, the franchisor also settled a breach of contract and fraudulent inducement counterclaim with a former Curio brand franchisee who had sought $30 million in damages. There are no collection suits brought against franchisees and former franchisees in 2024.

Renewal Conditions

Tru by Hilton franchisees do not have the right to renew or extend their franchise agreement. However, if Hilton Franchise Holding LLC, in its sole discretion, decides to offer a re-license, the franchisee may be required to sign a new contract with terms and conditions that could differ significantly from the original agreement. Franchisees would also need to comply with any specific property improvement plan (PIP) performance conditions set by the franchisor.

Staffing Notes

Tru by Hilton requires franchisees to provide qualified and experienced management for their hotel. This management can be either the franchisee directly or an approved third-party management company. Key management personnel, such as the general manager, commercial leaders, and sales staff, are mandated to complete specific training programs covering property management systems (HPMS), revenue optimization, Hilton Honors, and core sales skills. All front desk staff and management must undergo HPMS training, with up to three management staff requiring certification for OnQ. Comprehensive brand learning programs, including new employee orientation, hospitality training, and role-assigned certifications, are mandatory for all hotel staff. Additionally, all hotel personnel must complete problem avoidance and satisfaction guarantee training. The franchisor verifies that staff fulfill these training requirements before the hotel's opening.