Tapestry Collection by Hilton
Tapestry Collection by Hilton operates mid-scale hotels offering guests comfortable accommodations and convenient amenities. Known for its blend of modern design and classic hospitality, these properties cater to a wide range of travelers. Part of Hilton Worldwide, Tapestry focuses on the midscale segment of the hotel industry.
Tapestry Collection by Hilton franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a typical 125-room Tapestry hotel, excluding real property, ranges from $2,861,047 to $70,253,147. This includes up to $400,630 that must be paid to the franchisor or its affiliates. [p.1]
What is the initial franchise fee?
The initial franchise fee is only payable if you are installing an eforea spa in your Hotel, according to [p.48]. This fee is not refundable under any circumstances, as stated on pages 25 and 230.
What are the ongoing royalty and advertising fees?
Ongoing royalties are typically based on a percentage of the hotel's monthly gross room revenue and may also include percentages of gross food and beverage revenues, as detailed on [p.129]. There is no specified requirement for maintaining an advertising fund or engaging in particular advertising programs; however, you must advertise your restaurant brands according to specifications at your expense, as outlined on [p.73] and [p.150].
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts.
Can I sell or transfer my franchise, and what does that require?
The franchisor can refuse to permit a transfer of ownership of your franchise except for good cause. Good cause includes but is not limited to specific reasons determined by the franchisor [p.5]. This provision also applies if the offer to sell a franchise is accepted in Washington, and the purchaser or the franchised business is located there [p.296].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement for material breaches by the franchisee, such as failure to cure a breach or payment defaults [p.23, p.22]. Additionally, the franchise agreement may allow termination without specific cause upon changes to the business model that require additional investments or harm the franchise business [p.3]. This isn't specified in the excerpts for other explicit grounds of termination by the franchisor.
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. The FDD indicates that there are no provisions granting franchisees a protected area or territory for either the hotel operation [p.74] or the food and beverage outlet [p.74]. However, under certain circumstances, a Restricted Area Provision may be agreed upon, but it is typically for a shorter period than the term of the Franchise Agreement and does not provide protection from existing hotels managed by the franchisor or its affiliates [p.75, p.76].
What training and ongoing support does the franchisor provide?
The franchisor provides required training courses for specific business and operational functions [p.65], including web-based OnQ Rate and Inventory Management training that must be completed with a minimum score of 80% [p.67]. For new hires, replacements must also successfully complete the appropriate training programs [p.65]. The franchisor does not direct or supervise personnel but provides necessary training content to ensure compliance with their standards [p.221, p.150].
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor can provide actual records of an existing outlet if you are purchasing one. Additionally, they may supplement the financial performance information provided in Item 19 under certain circumstances, such as providing possible performance at a particular location or under specific conditions [p.99]. However, the franchisor does not make any representations about future financial performance and prohibits their employees from making such claims [p.100].
What am I restricted to selling, and where must I buy supplies?
You are generally not restricted to selling specific items, but the franchise agreement may prohibit you from operating a similar business during the term of the franchise. Regarding supplies, while you have the option to purchase certain items from suppliers designated by the franchisor or its affiliates at potentially higher costs, this is not mandatory [p.3, p.49, p.30].