Hampton Inn & Suites Franchise Costs, Fees & FDD

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Year Business Began: 1983

Franchising Since: 1984

Headquarters: McLean, Virginia

Estimated Number of Units: 3,075

Franchise Description: Hilton Franchise Holding LLC is the franchisor. The franchisor licenses the Hampton Inn hotel system, which consists of the elements, including know-how, that it periodically designates to identify hotels operating worldwide under two brands: “Hampton Inn” hotels, designed to provide distinctive, high quality hotel service to the public at moderate prices; and “Hampton Inn & Suites” hotels, designed to combine standard guest rooms with a significant block of studio guest suites.
Training Overview: The franchisor offers required training courses to those affiliated with the system for orientation and as part of the certification process. The personnel designated to take training must complete the required training to the franchisor’s satisfaction. If a replacement is hired for any of the categories of personnel who must attend a training program, the replacement must successfully complete the appropriate training program. There are currently over 10 training programs, not including owner orientation for all first-time franchisees and the portfolio of virtual learning classes for franchisees that do not have prior hospitality or comparable brand experience. The franchisor and its affiliates offer many additional optional training courses and may develop additional training programs at any time. The franchisor requires participation by the franchisee’s general manager and director of sales in an annual brand or regional conference.

Territory Granted: The franchisor grants franchisees a non-exclusive license to use the system during the term of the Franchise Agreement to operate a franchised hotel at a specified location. There are no provisions in the standard Franchise Agreement granting franchisees a protected area or territory. Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from hotels the franchisor’s affiliates own, or from other channels of distribution or competitive brands that the franchisor controls. The franchisor may, however, agree to give franchisees certain specific territorial restrictions (called restricted area provisions) for an area surrounding the franchised hotel and encompassing the immediate competitive market for the hotel as may be agreed on by the parties.

Obligations and Restrictions: Franchisees must provide qualified and experienced management for the operation of the hotel. To fulfill this responsibility, the hotel must be operated either by franchisees or a third-party management company that the franchisor has approved. No other person or entity may operate the hotel. The franchisor does not impose any restrictions as to the customers to whom franchisees may sell goods or services. In general, franchisees must comply with the franchisor’s requirements as to the types and levels of services, amenities and products that must or may be used, promoted or offered at or in connection with the hotel. Franchisees must operate the hotel 24 hours a day every day, except as the franchisor may otherwise permit based on special circumstances. Franchisees must operate, furnish, maintain and equip the hotel in a clean, safe and orderly manner and in first-class condition under the provisions of the Franchise Agreement and the standards, and in compliance with all applicable local, state, and federal laws, customs and regulations, including maintaining and conducting their business using sound business and financial practices.

Term of Agreement and Renewal: The length of the initial franchise term for new construction hotels is generally 22 years (at midnight on the last day of the month) after the effective date. For a conversion the term is generally the last day of the month 10 to 20 years after the opening date. In a change of ownership, the term is generally either the remaining term under the existing Franchise Agreement, or such other term as the franchisor may approve. Franchisees do not have the right to renew or extend the Franchise Agreement.

Financial Assistance: The franchisor may occasionally allow payment of the franchise application fee in installments over a limited time period before the start of construction work on the hotel. In addition, the franchisor may, in its sole discretion, offer incentives for new hotels. The incentive is a financial contribution that the franchisor makes to assist with the development or conversion of the franchisee’s hotel. Other than the development incentive program described, the franchisor does not offer direct or indirect financing for franchisees. The franchisor generally does not offer any other financing or guarantee any note, lease, or other obligations. However, in unique or rare circumstances the franchisor may choose to offer other types of financing such as, for example, a mezzanine loan or a guaranty of a franchisee’s note, lease, or other obligations.

Estimated Initial Investment

Name of Fee	Low	High
Franchise Application Fee	$100,000	$100,000
Product Improvement	$0	$10,000
Market Study	Varies
Environmental Assessment	Varies
Real Property	Varies
Construction/Leasehold Improvements	$11,139,759	$18,676,372
Design and Engineering Fees	$445,509	$747,055
Furniture, Fixtures and Equipment	$1,228,796	$2,121,669
Inventory and Operating Equipment	$99,000	$220,000
Signage	$25,000	$75,000
Computer Hardware and Software Systems	$32,685	$89,054
Guest Internet Access System	$45,467	$82,766
Connected Room System	$22,345	$32,585
Delphi Sales and Events System	$900	$16,900
Required Pre-Opening Training	$5,000	$17,500
ADA Consultant Fee	$2,500	$10,000
Construction/Renovation Extension Fees	$0	$10,000
Insurance	Varies
Organizational Expense	$50,000	$135,239
Permits, Licenses and Governmental Fees	$167,096	$280,146
Miscellaneous Pre-Opening and Project Management Expenses	$334,193	$560,291
Contingencies	$1,113,976	$1,867,637
Additional Funds	$400,000	$900,000
Other Required Pre-opening Services Fees	$6,000	$6,000
ESTIMATED TOTAL*	$15,218,226	$25,958,214

* This estimated initial investment ranges from an 89-Room Hampton Inn to a 113-Room Hampton Inn & Suites. These figures do not include real estate costs, market studies, insurance, interest or the cost of improvements under a conversion, re-licensing or change of ownership license. Please see FDD for more details.

Other Fees
Note: Below is only a partial table. Please see the FDD for all other fees.

Type of Fee	Amount
General Fees
Monthly Royalty Fee	6% of gross rooms revenue (GRR).
Monthly Program Fee	4% of GRR.
Room Addition Fee	Currently, $400 per guest room or suite, multiplied by the number of additional guest rooms.
Property Improvement Plan Fee	Currently, $10,000.
Computer System Fees
OnQ Connectivity Fees	Currently, between $400 and $600 per month.
Hardware and Software Maintenance Support Fees	Currently, between $1,114 to $2,568 per month.
OnQ Email Fees	Currently, $7.92 per user per month and $12.50 per month for delivery to mobile devices.
Connected Room Maintenance Fees	Currently, $417 to $779 per month.
Delphi Sales and Events System	Currently, $858 per user per year.
Guest Assistance and Quality Assurance Program Fees
Guest Assistance Program: Customer Satisfaction Guarantee	Currently, $300 per handled transaction for Hilton Honors Diamond members, $250 per handled transaction for Hilton Honors Gold members, and $200 per handled transaction for all other guests.
Guest Assistance Program: Price Match Guarantee	Hotels must honor a 25% discount off the lower rate on all approved claims.
Plans and Designs Late Fee	Currently, $5,000 every 90 days.
Brand Non-Compliance Fee	Currently, $65 to $145 per approved guest room.
Brand Non-Compliance Re-Evaluation Fee	Currently, up to $4,500.
Brand Non-Compliance Special Audit Fee	Currently, $5,500 per special audit.
PIP/Renovation Failure Fee	Currently, $10,000 every 6 months.
Stay Score Failure Fee	Currently, up to $300 per guest room or 0.5% of GRR annually.
Service Quality Improvement Program	Currently, $20,000 to $50,000 for each 6-month period in the program.
Conferences and Training Fees
Brand Conference	Currently, $2,500 per attendee.
General Manager, Commercial and Sales Leader Training	Currently, up to $1,200 per attendee.
Hilton Core Sales Skills Training	Currently, up to $600 per attendee.
Other Training Programs and Training Materials	Currently, up to $5,000 per program per attendee.
Frequent Customer, Affiliation and Distribution Program Fees
Travel Clubs	Currently, $0.30 per available room plus 10% commission. Amount may vary by program.
Hilton Advance Program	Currently, 1.35% of eligible Digital Direct Revenue, not to exceed $30 per stay.
Group Preferred Partnership Program	Currently, up to $1.80 per consumed room night plus applicable commission. If we increase this fee this year, it will not exceed $2.50 per consumed room night plus commission.
Hilton Honors Frequent Traveler/Guest Reward Program	Currently, 4.9% of total eligible guest folio. This fee is waived for stays in which the guest is enrolled on-property in Hilton Honors.
Hilton Honors Event Planner Bonus Program	Currently, $0.0025 to $0.0050 per Hilton Honors bonus point awarded.
Hilton For Business Program	Currently, up to 3% of the GRR per eligible consumed stay.
Online Group Event Booking Charges	Currently, up to 2% of GRR and up to $25 for included meeting space, plus applicable commissions.
Centralized Payment Programs	Vary by program.
Add-On Program Fee	Currently, up to 5% of the sale price of add-on products and services sold to customers via the add-on program, excluding taxes.
Transfers, Re-licensing and Financing Fees
Change of Ownership Application Fee	Currently, $200,000.
Permitted Transfer Processing Fee	Currently, $5,500.
Re-licensing Application Fee	Currently, $100,000.
Lender Comfort Letter Processing Fee	Currently, $3,500 for lender comfort letters and $1,500 for lender comfort letter assignments.
Public Offering or Private Placement Processing Fee	Currently, $5,000.
Management Fees
Management Fees	Fees will be established by mutual agreement.
Remedies and Damage Fees
Actual Damages Under Special Circumstances	Varies.
Audit	Actual deficiency plus interest.
Default Remedies	Reimbursement of all of the franchisor's expenses.
Indemnification	Reimbursement for all payments by the franchisor or its affiliates due to any claim, demand, tax, penalty, or judicial or administrative investigation or proceeding arising from any claimed occurrence at the hotel.
Insurance	Actual amount.
Liquidated Damages for Unauthorized Opening	$5,000 per day that the hotel is open without authorization.
Liquidated Damages for Pre-Opening Termination	The system’s average monthly royalty fees multiplied by 60.
Liquidated Damages for Post-Opening Termination	Before 2nd Anniversary of the Opening Date: The greater of: (a) the hotel’s average monthly royalty fees multiplied by 60; or (b) the system’s average monthly royalty fees multiplied by 60. After 2nd Anniversary of the Opening Date, but Before the Final 60 Calendar Months of Term: The hotel’s average monthly royalty fees multiplied by 60. Within the Last 60 Months of Term: The hotel’s average monthly royalty fees multiplied by the number of months remaining in the term.
Service Charges for Overdue Payments	1.5% per month or highest percentage permissible by law, whichever is less.
Taxes	Actual amount.
Identity, Sales, and Distribution Non-Compliance Fee	Currently, $500 per instance.
FastPay Non-Compliance Fee	Varies and escalates based on the number of violations.

The above information has been compiled from the FDD of Hampton Inn & Suites. Year of FDD: 2025.
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