How much does a Home2 Suites franchise cost?
A newly constructed 107-suite Home2 Suites by Hilton hotel requires an estimated initial investment of $18,075,688 to $26,550,592, excluding real property, under the 2026 U.S. Franchise Disclosure Document. The disclosed total already includes $400,000 to $800,000 of Additional Funds for the first three months after opening, including payroll costs.
2026 Estimated Initial Investment: the Item 7 range for the 107-suite Home2 Suites prototype. Real property, market studies, insurance, interest, and separately identified conversion or re-licensing improvements are not resolved by this total. Source: 2026 FDD, cover and Item 7, pages 36–40.
Data basis: Hilton Franchise Holding LLC, 2026 U.S. Home2 Suites by Hilton Franchise Disclosure Document, issued March 30, 2026. The cost analysis uses Items 5, 6, and 7, plus cost-relevant disclosures in Items 8, 10, 11, and 17. The primary Item 7 model is a 107-suite hotel; New Development, Conversion, Change of Ownership, Re-licensing, and Adaptive Reuse are distinct development paths, but the FDD does not publish a separate complete Item 7 total for each path. Information checked July 22, 2026. See Hilton’s official U.S. disclosure documents page.
Capital snapshot
The opening range is not the same as the franchise fee, cash-on-hand requirement, or recurring fee burden. These figures answer different parts of the capital decision.
The 2026 FDD does not disclose a minimum Liquid Capital, Net Worth, or Non-Borrowed Funds threshold for Home2 Suites. A buyer should not substitute a directory’s “cash required” figure for a franchisor qualification that is absent from the current FDD.
What is included in the Home2 Suites initial investment?
The 2026 Item 7 total combines the Franchise Application Fee, construction, design, Furniture, Fixtures and Equipment, technology, opening inventory, professional and governmental costs, contingencies, and three months of Additional Funds. Three categories—Real Property, Market Study, and Insurance—are disclosed as variable and are not included in the arithmetic total.
Property, design, and construction
Construction and Leasehold Improvements are the dominant disclosed cost category. The estimate is based on a 107-suite mix of four Queen Suites, 96 Studio Suites, and seven Accessible Suites, and it does not account for every local code, impact-fee, labor, or material condition.
| Item 7 expenditure | 2026 amount | When paid | Payee |
|---|---|---|---|
| Franchise Application Fee | $100,000 | With Application | Hilton Franchise Holding LLC |
| Property Improvement Plan | $0–$10,000 | Before the PIP is prepared | Franchisor |
| Market Study | Varies | As incurred | Supplier |
| Environmental Assessment | Varies | As incurred | Supplier |
| Real Property | Varies | As agreed | Supplier |
| Construction and Leasehold Improvements | $12,800,000–$18,555,000 | As agreed | Suppliers |
| Design and Engineering Fees | $512,000–$742,200 | As incurred | Suppliers |
| Furniture, Fixtures and Equipment | $1,910,000–$2,770,000 | As incurred | Suppliers |
Equipment, systems, and opening readiness
The Home2 Suites operating model requires suite furnishings, kitchen-related equipment, signage, Hilton technology systems, Guest Internet Access, Connected Room components, Delphi, and pre-opening training. The current Home2 Suites brand information shows the all-suite, in-room kitchen configuration that helps explain why FF&E, Operating Equipment, and technology are material parts of the cost structure.
| Item 7 expenditure | 2026 amount | When paid | Payee |
|---|---|---|---|
| Inventory and Operating Equipment | $280,000–$405,000 | As incurred | Suppliers |
| Signage | $45,800–$66,500 | As incurred | Supplier |
| Computer Hardware and Software Systems | $32,701–$107,066 | 45 days before opening | Franchisor or supplier |
| Guest Internet Access System | $54,662–$78,371 | 45 days before opening | Supplier |
| Connected Room System | $26,035–$31,115 | 45 days before opening | Supplier |
| Delphi Sales and Events System | $990–$16,900 | As incurred | Supplier |
| Required Pre-Opening Training | $5,000–$17,500 | As incurred | Franchisor and suppliers |
| ADA Consultant Fee | $2,500–$10,000 | On request | Supplier |
Project completion and working capital
Item 7 reserves capital for professional fees, permits, project management, construction overruns, and the initial operating period. Additional Funds are already part of the official total and must not be added a second time.
| Item 7 expenditure | 2026 amount | When paid | Payee |
|---|---|---|---|
| Construction or Renovation Extension Fees | $0–$10,000 | On request | Franchisor |
| Insurance | Varies | As arranged | Agent or insurer |
| Organizational Expense | $50,000–$143,115 | As agreed | Accountant or attorney |
| Permits, Licenses and Governmental Fees | $192,000–$278,325 | As required | Government agencies |
| Miscellaneous Pre-Opening and Project Management Expenses | $378,000–$548,000 | As incurred | Suppliers |
| Contingencies | $1,280,000–$1,855,500 | As incurred | Suppliers |
| Additional Funds | $400,000–$800,000 | As incurred during first 3 months | Suppliers and operating payees |
| Other Required Pre-Opening Services Fees | $6,000 | Before opening | Franchisor |
| Official Item 7 total | $18,075,688–$26,550,592 | Excludes the variable categories identified by the FDD | |
The scale uses $18,555,000, the maximum Construction and Leasehold Improvements estimate, as 100%. This is a maximum-only comparison, not a typical budget or an additive total.
Interpretation: the high end is primarily a construction question; smaller categories remain material but do not explain the range to the same degree. Source: 2026 FDD, Item 7, pages 36–40; official Hilton disclosure documents.
When is the money paid?
The capital is paid in stages rather than as one check. The first fixed payment is normally the $100,000 Franchise Application Fee, while the largest construction, FF&E, professional, and governmental amounts are paid to third parties as the project advances.
Application
Pay the $100,000 Franchise Application Fee with a New Development, Conversion, or Re-licensing Application. A Change of Ownership Application Fee is $200,000. If a PIP is required, the current PIP Fee is $10,000 before inspection or preparation.
Design, approvals, and early project work
Market studies, environmental work, design, engineering, organizational expenses, permits, and professional services are paid as agreed or incurred. Real Property is negotiated separately and remains outside the Item 7 total.
Construction and procurement
Construction and Leasehold Improvements, FF&E, Inventory and Operating Equipment, Signage, project management, and Contingencies are paid to suppliers according to contracts and the construction schedule. If Hilton Supply Management performs procurement services, its fee is currently 4% to 10% of project or product cost, in addition to product, freight, taxes, and actual costs.
Technology installation before opening
Computer Hardware and Software Systems, Guest Internet Access, and Connected Room costs are generally due about 45 days before opening. The HITS Agreement is normally signed about 90 to 120 days before opening.
Training and opening services
Required Pre-Opening Training is paid as incurred, including wages, travel, lodging, food, and other attendee expenses. The $6,000 Opening Process Services Fee is due before opening.
First three operating months
The $400,000 to $800,000 Additional Funds estimate is spent as operating obligations arise after opening. It includes payroll costs. The FDD does not separately state whether owner compensation is included.
Item 10 says Hilton generally requires the Franchise Application Fee in a lump sum, but may occasionally permit installments before construction starts, without interest or a security interest. This is discretionary and should not be treated as standard financing.
Does the same cost range apply to conversions and ownership changes?
No. The cover’s $18,075,688 to $26,550,592 range is expressly for a newly constructed 107-suite Home2 Suites hotel. The FDD recognizes Conversion, Adaptive Reuse, Change of Ownership, and Re-licensing, but it does not publish a separate complete investment range that can be safely substituted for the New Development total.
Why a conversion cannot be priced from the prototype alone
New Development
The 107-suite prototype supplies the stated construction, design, FF&E, inventory, signage, technology, contingency, and Additional Funds ranges. New construction generally has a 22-year franchise term from the Effective Date.
Conversion or Adaptive Reuse
A PIP identifies required upgrades. Renovation cost depends on the building’s age, code compliance, life-safety systems, structural condition, existing finishes, and conformity with Brand Standards. The FDD says it cannot estimate pre-conversion expenses or contingencies for an existing hotel.
Change of Ownership
The Application Fee is currently $200,000. A PIP Fee, required upgrades, technology refreshes, transfer closing obligations, and the remaining or approved franchise term can alter the cash requirement.
Re-licensing
The Application Fee is currently $100,000. There is no contractual right to renew or extend; if Hilton agrees to re-license, a new agreement, PIP conditions, current systems, and then-current Brand Standards may apply.
For an existing hotel, the cost-defining document is the project-specific PIP and approved renovation scope—not the low end of the New Development Item 7 range. The official Home2 Suites fact sheet can confirm current brand features, but only the current FDD, Franchise Agreement, PIP, plans, and supplier quotes establish the buyer’s cost obligations.
Which Home2 Suites fees continue after opening?
The core percentage fees are the 6% Monthly Royalty Fee and the 3.5% Monthly Program Fee, each calculated on Gross Rooms Revenue and normally due by the 15th day of the following month. Technology, connectivity, loyalty, distribution, training, conference, and compliance charges can also continue after opening.
| Recurring fee | 2026 basis | Timing | Cost meaning |
|---|---|---|---|
| Monthly Royalty Fee | 6% of Gross Rooms Revenue | Monthly, by the 15th | Core brand royalty |
| Monthly Program Fee | 3.5% of Gross Rooms Revenue | Monthly, by the 15th | Reservation, marketing, quality, technology, and administration programs; rate may rise by up to 1 percentage point over the term |
| Hilton Honors Program | 2.0% of total eligible guest folio | 10 days after billing | Required loyalty-program charge; waived for stayswith on-property enrollment |
| OnQ Email | $7.92 per user per month; $12.50 per month for mobile delivery | Quarterly | Minimum of three accounts |
| Delphi Sales and Events System | $858 per user per year | Annually | License and maintenance |
| Brand Conference | $2,500 per attendee | Before attendance | General manager and sales leader attendance is normally required |
| Required role training | Up to $1,200, $600, or $5,000 per attendee depending on program | Before attendance | Separate from wages, travel, lodging, food, and some trainer expenses |
Each range uses the same unit—U.S. dollars per month. The axis runs from $0 to $2,553, the highest disclosed monthly amount in this comparison.
Interpretation: percentage fees are not the only ongoing obligation; fixed monthly technology and connectivity charges can span several separate systems. Source: 2026 FDD, Item 6, pages 21–22, and Item 11, pages 50–52; official Hilton disclosure documents.
Which program charges depend on bookings or participation?
Item 6 also imposes transaction, stay, room-night, commission, and eligible-revenue charges. They should not be converted into a single annual dollar figure without the hotel’s actual transaction mix.
| Program fee | 2026 basis | When it applies | Status |
|---|---|---|---|
| Travel Clubs | $0.30 per available room plus 10% commission | Consumed AAA and CAA stays | Program-specific |
| Hilton Advance Fee | 1.35% of eligible Digital Direct Revenue, capped at $30 per stay | Eligible direct-channel bookings | Current program |
| Group Preferred Partnership Program | Up to $1.80 per consumed room night or up to 3% of Net Rooms Revenue, plus commission | Participating group intermediaries | Optional |
| Online Group Event Booking Charges | Up to 2% on Brand.com, 5% on Groups360.com, and 7% on RFP bookings | Loaded inventory that actualizes | Currently optional; may become required |
| Centralized Payment Programs | Up to $6.05 per stay, $1.40 per transaction plus commission, or $0.19 per transaction plus up to 10% commission, depending on program | Specified third-party reservation and payment channels | Required programs |
| Add-On Program Fee | Up to 5% of sale price excluding taxes | Approved Add-On sales through direct booking channels | Currently optional |
| ResMax | 5.4%–5.9% of consumed revenue from a ResMax booking, with a three-night maximum | Reservation call-handling service | Optional, but required in certain circumstances |
| RMCC services | $895–$1,815 one-time; monthly models from $615 to $15,709 depending on category | Selected revenue-management support model | Optional or required under stated triggers |
Except for the Monthly Royalty Fee and liquidated damages, Item 6 states that the listed fees are subject to change. The Monthly Program Fee itself may be increased, but not by more than one percentage point of Gross Rooms Revenue over the Franchise Agreement term.
Which fees are triggered by transfers, delays, noncompliance, or system changes?
Home2 Suites has material event-driven charges beyond the recurring fee schedule. Some are fixed processing fees; others depend on the number of rooms, frequency of noncompliance, project cost, or the remaining franchise term.
Room addition: currently $400 per added guest room or suite, paid with the approval Application.
Transfer and re-licensing: $200,000 Change of Ownership Application Fee; $5,500 Permitted Transfer Processing Fee; $100,000 Re-licensing Application Fee.
Lender documents: $3,500 for a Lender Comfort Letter and $1,500 for a Lender Comfort Letter Assignment; a public offering or private placement request is currently $5,000 plus additional review costs.
Design and renovation delay: $5,000 every 90 days for Past Due Design and $10,000 every six months for Past Due Renovation.
Quality and service: Brand Non-Compliance Fee of $65 to $145 per approved room, capped at $50,000 per six-month period; $2,500 Re-Evaluation Fee; $3,000 Special Audit Fee; and $20,000 to $50,000 for each six-month Service Improvement Program period.
Late or unauthorized action: overdue payments carry 1.5% per month or the highest lawful rate, whichever is less; unauthorized opening carries $5,000 per day plus costs.
Technology refresh: OnQ must generally be refreshed at least every three years and Guest Internet Access at least every four years. A Change of Ownership or Re-licensing may trigger earlier refreshes. The FDD anticipates refresh cost will be the same as or less than the original installation, excluding original-installation-only elements.
Cycled renovation and current Brand Standards: Hilton may require periodic replacement, modernization, rehabilitation, and upgrades to FF&E, finishes, signage, computer systems, supplies, and other assets. No fixed lifetime amount is disclosed.
The opening total does not reserve a stated amount for every later remodel, technology refresh, PIP, transfer, re-licensing, quality-remediation program, termination payment, or de-identification obligation. These are separate future or conditional liabilities.
Does Hilton finance a Home2 Suites development?
Generally, no. Item 10 says Hilton does not ordinarily offer direct or indirect financing, guarantee a note, lease, or other obligation, or disclose standard loan terms. Hilton may selectively provide a Development Incentive or, in rare circumstances, negotiate another financing arrangement.
Application Fee installments: Hilton may occasionally allow the $100,000 Franchise Application Fee to be paid in installments before construction begins, without interest. A default accelerates the unpaid balance.
Development Incentive: a discretionary contribution for development or conversion, normally disbursed within 30 days after an approved opening if stated conditions are met.
Contingent repayment: the Incentive is not described as a loan, but it becomes repayable after an early termination or certain transfers. The repayable amount declines in equal annual portions over the franchise term.
External capital access: Hilton’s hotel ownership opportunities page describes a Bridge by Foro lender platform. That official program may facilitate introductions; it is not a promise of approval, rate, leverage, or sufficient proceeds.
Because no Home2 Suites Liquid Capital or Net Worth threshold is stated in the 2026 FDD, a prospect must obtain project-specific qualification criteria from Hilton and separately demonstrate enough equity and financing to cover real estate, construction, soft costs, contingencies, and operating liquidity. The official Hilton development page identifies the current development organization, while the cost contract remains governed by the current FDD and signed agreements.
What does the official range not settle?
The Item 7 total is complete only within its stated assumptions. It does not turn site-specific, financing, conversion, and long-term Brand Standards obligations into fixed amounts.
Real Property: confirm acquisition price, ground lease, deposits, site work, access, utilities, assessments, and local development conditions.
Market Study and Environmental Assessment: obtain current third-party scopes and fees; both are variable in Item 7.
Insurance and interest: neither is included as a fixed amount in the official total. Construction-period interest, lender fees, reserves, and insurance depend on the transaction.
Conversion scope: reconcile the PIP, ADA work, fire and life-safety requirements, structural conditions, technology replacement, signage, and de-identification of the prior brand.
Additional Funds: test whether $400,000 to $800,000 is sufficient for the project’s first three months; payroll is included, but owner compensation is not separately identified.
Fee version and state addenda: verify that the signed FDD, Franchise Agreement, HITS Agreement, and applicable state addenda are the current documents for the transaction.
Four-year and three-year refresh cycles: reserve for Guest Internet Access and OnQ replacement, plus cycled renovations and current Brand Standards that have no fixed future total.
The FTC explains that Item 5 covers initial payments to the franchisor, Item 6 covers other fees, and Item 7 estimates the opening investment; buyers still need to investigate costs not fully quantified in those Items. See the FTC Consumer’s Guide to Buying a Franchise.
What capital question should a Home2 Suites buyer answer?
The verified starting point is $18,075,688 to $26,550,592 for a newly constructed 107-suite Home2 Suites hotel, plus unresolved Real Property, Market Study, Insurance, and interest costs. The largest disclosed variable is Construction and Leasehold Improvements; the biggest recurring percentage obligations are the 6% Monthly Royalty Fee and 3.5% Monthly Program Fee. A conversion or ownership transfer requires a separate PIP-driven budget rather than reuse of the prototype range.
The central diligence question is whether the buyer’s equity, debt capacity, contingency reserve, and first-three-month operating liquidity cover the specific site and project path while leaving room for technology refreshes, cycled renovations, and event-triggered fees that are not fixed in Item 7.
Official corporate landing page for available regional and brand FDDs.
Official Americas development contact information for current project criteria.
Federal disclosure framework requiring the 23-item FDD.
Official guidance on reading and challenging disclosure assumptions.