How much does a Homewood Suites franchise cost?
The 2026 Homewood Suites Franchise Disclosure Document estimates $23,757,245 to $34,728,465 to open a newly constructed 131-suite Homewood Suites by Hilton hotel. The range excludes real property and several other amounts that Hilton Franchise Holding LLC says cannot be estimated in advance.
Key cost figures
What is included in the $23.76 million to $34.73 million range?
The range is dominated by Construction and Leasehold Improvements, followed by Furniture, Fixtures and Equipment, Contingencies, and Additional Funds. These are 2026 Item 7 figures for the 131-suite new-development model, not estimates for an acquisition or conversion.
Shared scale from $0 to $24.5 million. Each teal segment shows the official low-to-high range, not an average or recommended budget.
Interpretation: construction is the principal disclosed driver of the range; Item 7 says regional labor, material, site, code, and facility-condition variables can materially change that cost. Source: 2026 Homewood Suites FDD, Item 7, pages 34–38; see Hilton’s official disclosure-document library.
Major premises, equipment, and working-capital categories
| Item 7 category | 2026 amount | When due | Paid to |
|---|---|---|---|
| Construction and Leasehold Improvements | $16,900,000–$24,500,000 | As agreed | Suppliers |
| Design and Engineering Fees | $676,000–$980,000 | As incurred | Suppliers |
| Furniture, Fixtures and Equipment | $2,480,000–$3,600,000 | As incurred | Suppliers |
| Inventory and Operating Equipment | $350,000–$512,000 | As incurred | Suppliers |
| Permits, Licenses and Governmental Fees | $253,500–$367,500 | As required | Government agencies |
| Contingencies | $1,690,000–$2,450,000 | As incurred | Suppliers |
| Additional Funds | $600,000–$1,000,000 | During first 3 months | Suppliers |
The Additional Funds line is already included in the total. Item 7 defines it as estimated initial operating expenses for three months after opening and expressly includes payroll costs. Adding it again to the Item 7 total would double-count working capital.
Technology and other pre-opening amounts
The 131-suite model also carries separate required systems and pre-opening services. The official Hilton development site describes its architecture, design, construction, and opening resources, but the financial amounts below come from the 2026 FDD rather than marketing material. See Hilton hotel development information.
| Required category | 2026 amount | Payment timing | FDD reference |
|---|---|---|---|
| Computer Hardware and Software Systems | $33,391–$123,519 | 45 days before opening | Item 7, pp. 35–37 |
| Guest Internet Access System | $62,909–$91,936 | 45 days before opening | Item 7, pp. 35–37 |
| Connected Room System | $30,955–$36,995 | 45 days before opening | Item 7, pp. 35–37 |
| Delphi Sales and Events System | $990–$16,900 | As incurred | Item 7, pp. 35–37 |
| Required Pre-Opening Training | $5,000–$17,500 | As incurred | Item 7, pp. 35–38 |
| Miscellaneous Pre-Opening and Project Management Expenses | $480,000–$695,500 | As incurred | Item 7, pp. 35–38 |
| Other Required Pre-Opening Services Fees | $6,000 | Before opening | Item 7, pp. 35–38 |
Item 7 says the technology amounts may differ from Item 5 because Item 7 includes third-party costs. Required business systems include OnQ, Guest Internet Access, the GRO System, Delphi, Connected Room, a Digital Floor Plan, Digital Key, and the Hilton Opening Transition Tool. Optional accounting, payroll, point-of-sale, telephone, and certain inventory systems are not fully captured in the disclosed technology lines.
Does the same investment range apply to a conversion or hotel purchase?
No. The $23.76 million to $34.73 million range is the 2026 estimate for a newly constructed 131-suite hotel. Hilton Franchise Holding LLC says it cannot provide a complete cost estimate for a Conversion because the existing building’s age, structure, code compliance, fire and life-safety systems, furniture, finishes, and condition vary too much.
One complete Item 7 range
$23,757,245–$34,728,465 for a newly constructed 131-suite hotel, excluding real property and other listed omissions. New Construction generally has a 22-year term measured from the Effective Date.
No complete official total
The standard Application Fee is $100,000, and a $10,000 PIP Fee may apply. Improvement costs are project-specific. The official Homewood Suites Prototype 10.0 information confirms the 131-suite design context, but does not replace a conversion PIP or project budget.
Different application contract
A Change of Ownership Application Fee is $200,000; Re-licensing is $100,000. A PIP, ADA consultant, renovation work, and technology refreshes may also be required. These obligations are not represented by the new-development Item 7 range.
When is the capital paid?
The cash is not paid in one installment. The 2026 FDD places the Franchise Application Fee at the start, construction and design payments throughout development, core technology payments about 45 days before opening, and Additional Funds during the first three operating months.
The FTC Franchise Rule generally requires delivery of the FDD at least 14 calendar days before the prospect signs a binding agreement or pays the franchisor or an affiliate. See the FTC guide to buying a franchise.
For New Development or Conversion, the standard Franchise Application Fee is $100,000. Change of Ownership uses a $200,000 Application Fee; Re-licensing uses $100,000.
The PIP Fee is due before the PIP inspection is scheduled. Construction, Design and Engineering Fees, Furniture, Fixtures and Equipment, permits, project management, and contingencies are generally paid as agreed or as incurred.
Item 7 places the principal Computer Hardware and Software Systems, Guest Internet Access System, and Connected Room System payments at this milestone. Item 11 also says OnQ connectivity billing begins when the internet circuit is installed, about 45 days before opening.
The $6,000 Opening Process Services Fee is due before opening. The $600,000 to $1,000,000 Additional Funds allowance then covers estimated initial operating expenses for three months after opening, including payroll costs.
Item 10 says Hilton generally requires the Franchise Application Fee in a lump sum, although it may occasionally allow installments over a limited period before construction begins. The FDD says those occasional installments carry no interest, but approval is discretionary and any outstanding amount accelerates after default.
Which Homewood Suites fees continue after opening?
The principal continuing brand charges are the Monthly Royalty Fee and Monthly Program Fee, both calculated from Gross Rooms Revenue. Required technology, internet, loyalty, reservation, distribution, training, and quality-assurance charges can continue in addition to those percentage fees.
Official percentage of Gross Rooms Revenue by operating period. The chart does not convert the percentage into a dollar cost.
Interpretation: the royalty steps up during the first two operating years; Change of Ownership and Re-licensing agreements use 5.5% of Gross Rooms Revenue from the start. Source: 2026 Homewood Suites FDD, Item 6, pages 20 and 31; Hilton’s official disclosure-document library.
For Item 6, Gross Rooms Revenue broadly includes revenue from guest-room sales and rentals, point or reward redemptions, breakfast amounts embedded in room rates, Mandatory Guest Fees, late-cancellation fees, and guaranteed no-show revenue, less permitted guest-room rebates and overcharges and excluding taxes collected directly from guests. The precise FDD definition controls the denominator.
| Continuing fee or system | 2026 basis | Timing | Key limitation |
|---|---|---|---|
| Monthly Royalty Fee | 3.5%, 4.5%, then 5.5% of Gross Rooms Revenue | Monthly, by 15th day of following month | Ramp applies to New Development or Conversion |
| Monthly Program Fee | 2.5% of Gross Rooms Revenue | Monthly, by 15th day of following month | May rise by up to 1 percentage point over the term |
| OnQ Connectivity Fees | $400–$600 per month | Monthly | Varies with workstations and OnQ equipment |
| OnQ Hardware and Software Maintenance Support | $1,321–$2,714 per month | Monthly | Does not cover every vendor-provided system |
| Guest Internet Access Circuit | $921–$1,665 per month | Monthly | Depends on circuit type, size, and location |
| Guest Internet Access Service | $547–$1,048 per month | Monthly | Depends on hotel size and meeting rooms |
| Delphi license and maintenance | $858 per user per year | Annually | Additional setup or integration costs may apply |
Other Item 6 charges depend on actual transactions or participation. Examples include Hilton Honors at 1.7% of the eligible guest folio, Hilton Advance at 1.35% of eligible Digital Direct Revenue capped at $30 per stay, travel and distribution commissions, centralized payment charges, optional group programs, and Revenue Management Consolidated Center service models. These should not be converted into a single annual amount without the hotel’s actual activity and applicable program contract.
Which fees are triggered by a later event or non-compliance?
Item 6 contains substantial event-driven charges that are not part of normal monthly royalty billing. They arise from expansion, transfers, delayed design or renovation work, quality-assurance issues, late payment, unauthorized opening, or early termination.
The Franchise Agreement also creates ongoing capital exposure through required modernization, cycled renovation, system updates, and technology refreshes. Item 8 states that Hilton may require replacement or upgrades of Furniture, Fixtures and Equipment, signage, computer hardware and software, supplies, inventory, and other items to meet then-current Standards. The owner bears those costs.
Does Hilton disclose a liquid-capital or net-worth requirement?
The 2026 Homewood Suites FDD does not state a fixed Liquid Capital, Net Worth, or Non-Borrowed Funds threshold. Instead, Hilton Franchise Holding LLC reviews the financial information submitted with the Application, the proposed ownership of the Hotel and real property, and then determines guaranty requirements.
- Estimated Initial Investment
- The 2026 Item 7 project range for the defined 131-suite model. It is not a statement of required cash equity.
- Liquid Capital
- No standardized minimum is disclosed in the 2026 FDD. A directory’s “cash required” figure should not be substituted for an official Hilton qualification.
- Net Worth
- No standardized minimum is disclosed in the 2026 FDD. Net Worth would not equal cash available for construction even if Hilton used it internally.
- Guaranty
- Hilton may require owners, spouses, or an acceptable third party to guarantee specified Franchise Agreement obligations after reviewing the Application and financing structure.
What financing or incentive support is disclosed?
Item 10 says Hilton generally does not offer direct or indirect financing other than a discretionary development incentive program. It may occasionally permit installments of the Franchise Application Fee before construction begins, and it may offer a financial contribution for development or conversion. The incentive is disbursed within 30 days after an approved opening if stated conditions are met.
The development incentive is not a guaranteed grant and not ordinary debt financing. The FDD calls it a contingent liability: a repayable amount can become due if the franchise terminates early or the Hotel is transferred without approved assumption of the development incentive note. The repayable balance declines over the franchise term.
Separately, Hilton’s official ownership initiative describes access to a lender platform through Bridge by Foro. That program may help potential hotel owners contact financing sources, but it does not change the FDD’s statement that Hilton generally does not finance the franchise or guarantee approval. See Hilton’s hotel-ownership and access-to-capital information.
What should be verified before treating the official range as a project budget?
The Item 7 total is a starting disclosure for one prototype, not a property-specific capital stack. A prospective franchisee should reconcile the current FDD with the actual site, building, PIP, financing documents, supplier quotes, and development schedule.
What capital picture should a prospective owner use?
For a newly constructed 131-suite Homewood Suites by Hilton hotel, the verified 2026 Item 7 range is $23,757,245 to $34,728,465, excluding real property and other stated omissions. The standard New Development or Conversion Franchise Application Fee is $100,000, and the Item 7 total already includes $600,000 to $1,000,000 of Additional Funds for the first three operating months.
The largest disclosed variable is Construction and Leasehold Improvements. A Conversion, Change of Ownership, or Re-licensing project requires a separate cost analysis because the FDD does not publish a complete compatible range for those paths. After opening, the principal percentage charges are the Monthly Royalty Fee and Monthly Program Fee, with technology, distribution, loyalty, quality-assurance, renovation, and event-triggered obligations layered on according to the applicable contract and circumstances.