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FRANCHISE DISCLOSURE DOCUMENTHilton Franchise Holding LLCa Delaware limited liability company7930 Jones Branch Drive, Suite 1100McLean, Virginia 22102703-883-1000www.hiltonworldwide.comYou will establish and operate a Tru by Hilton hotel under a Franchise Agreement with us.The total investment necessary to begin operation of a newly constructed 98-room Tru by Hiltonhotel, excluding real property, is 8,327,800 to 13,528,500 including up to 212,200 that mustbe paid to us or our affiliates.This disclosure document summarizes certain provisions of your franchise agreement and otherinformation in plain English. Read this disclosure document and all accompanying agreementscarefully. You must receive this disclosure document at least 14 calendar days before you sign abinding agreement with, or make any payment to, the franchisor or an affiliate in connection withthe proposed franchise sale. Note, however, that no government agency has verified theinformation contained in this document.The terms of your contract will govern your franchise relationship. Don’t rely on the disclosuredocument alone to understand your contract. Read all of your contract carefully. Show yourcontract and this disclosure document to an advisor, like a lawyer or accountant.Buying a franchise is a complex investment. The information in this disclosure document can helpyou make up your mind. More information on franchising, such as “A Consumer’s Guide to Buyinga Franchise,” which can help you understand how to use this disclosure document, is availablefrom the Federal Trade Commission. You can contact the FTC at 1-877-FTC-HELP or by writingto the FTC at 600 Pennsylvania Avenue, NW, Washington, DC 20580. You can also visit theFTC‘s home page at www.ftc.gov for additional information. Call your state agency or visit yourpublic library for other sources of information on franchising.There may also be laws on franchising in your state. Ask your state agencies about them.Issuance Date: March 30, 20192019 US TRU
STATE COVER PAGEYour state may have a franchise law that requires a franchisor to register or file with a statefranchise administrator before offering or selling in your state. REGISTRATION OF AFRANCHISE BY A STATE DOES NOT MEAN THAT THE STATE RECOMMENDS THEFRANCHISE OR HAS VERIFIED THE INFORMATION IN THIS DISCLOSURE DOCUMENT.Call the state franchise administrator listed in Exhibit I for information about the franchisor, aboutother franchisors, or about franchising in your state.MANY FRANCHISE AGREEMENTS DO NOT ALLOW YOU TO RENEW UNCONDITIONALLYAFTER THE INITIAL TERM EXPIRES. YOU MAY HAVE TO SIGN A NEW AGREEMENT WITHDIFFERENT TERMS AND CONDITIONS IN ORDER TO CONTINUE TO OPERATE YOURBUSINESS. BEFORE YOU BUY, CONSIDER WHAT RIGHTS YOU HAVE TO RENEW YOURFRANCHISE, IF ANY, AND WHAT TERMS YOU MIGHT HAVE TO ACCEPT IN ORDER TORENEW.Please consider the following RISK FACTORS before you buy this franchise.1.THE FRANCHISE AGREEMENT REQUIRES YOU TO RESOLVE DISPUTES WITH USBY LITIGATION ONLY IN FAIRFAX COUNTY, VIRGINIA, UNLESS WE SUE YOUWHERE THE HOTEL IS LOCATED. IF THE COURT REJECTS THESE VENUESELECTIONS, THEN SUIT MAY BE BROUGHT IN NEW YORK, NEW YORK. OUT OFSTATE LITIGATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLESETTLEMENT FOR DISPUTES. IT MAY ALSO COST MORE TO SUE US IN NEW YORKOR VIRGINIA THAN IN YOUR HOME STATE.2.THE FRANCHISE AGREEMENT STATES THAT NEW YORK LAW GOVERNS THEAGREEMENT, AND THIS LAW MAY NOT PROVIDE THE SAME PROTECTIONS ANDBENEFITS AS LOCAL LAW. YOU MAY WANT TO COMPARE THESE LAWS.3.THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.Effective Date: See the next page for state effective dates.2019 US TRU
Effective DatesThe following states require that the Franchise Disclosure Document be registered or filed withthe state, or be exempt from registration: California, Hawaii, Illinois, Indiana, Maryland, Michigan,Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington andWisconsin.This Franchise Disclosure Document is registered, on file or exempt from registration in thefollowing states having franchise registration and disclosure laws, with the following landMichiganMinnesotaNew YorkNorth DakotaRhode IslandSouth DakotaVirginiaWashingtonWisconsinIn all other states, the effective date of this Franchise Disclosure Document is the Issuance Dateof March 30, 2019.2019 US TRU
THE FOLLOWING APPLIES ONLY TO TRANSACTIONS GOVERNED BY THEMICHIGAN FRANCHISE INVESTMENT LAWTHE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARESOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWINGPROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS AREVOID AND CANNOT BE ENFORCED AGAINST YOU.(a)A prohibition on the right of a franchisee to join an association of franchisees.(b)A requirement that a franchisee assent to a release, assignment, novation, waiver orestoppel which deprives a franchisee of rights and protections provided in this act. Thisshall not preclude a franchisee, after entering into a Franchise Agreement, from settlingany and all claims.(c)A provision that permits a franchisor to terminate a franchise prior to the expiration of itsterm except for good cause. Good cause shall include the failure of the franchisee tocomply with any lawful provision of the Franchise Agreement and to cure such failure afterbeing given written notice thereof and a reasonable opportunity, which in no event needbe more than 30 days, to cure such failure.(d)A provision that permits a franchisor to refuse to renew a franchise without fairlycompensating the franchisee by repurchase or other means for the fair market value atthe time of expiration of the franchisee's inventory, supplies, equipment, fixtures andfurnishings. Personalized materials which have no value to the franchisor and inventory,supplies, equipment, fixtures and furnishings not reasonably required in the conduct of thefranchise business are not subject to compensation. This subsection applies only if (i) theterm of the franchise is less than 5 years and (ii) the franchisee is prohibited by thefranchise or other agreement from continuing to conduct substantially the same businessunder another trademark, service mark, trade name, logotype, advertising of othercommercial symbol in the same area subsequent to the expiration of the franchise or thefranchisee does not receive at least 6 months advance notice of Franchisor's intent not torenew the franchise.(e)A provision that permits the franchisor to refuse to renew a franchise on terms generallyavailable to other franchisees of the same class or type under similar circumstances. Thissection does not require a renewal provision.(f)A provision requiring that arbitration or litigation be conducted outside this state. This shallnot preclude the franchisee from entering into an agreement, at the time of arbitration, toconduct arbitration at a location outside this state.(g)A provision which permits a franchisor to refuse to permit a transfer of ownership of afranchise, except for good cause. This subdivision does not prevent a franchisor fromexercising a right of first refusal to purchase the franchise. Good cause shall include, butis not limited to:2019 US TRU
(i)The failure of the proposed transferee to meet the franchisor's then-currentreasonable qualifications or standards.(ii)The fact that the proposed transferee is a competitor of the franchisor orsubfranchisor.(iii)The unwillingness of the proposed transferee to agree in writing to comply with alllawful obligations.(iv)The failure of the franchisee or proposed transferee to pay any sums owing to thefranchisor or to cure any default in the Franchise Agreement existing at the time ofthe proposed transfer.(h)A provision that requires the franchisee to resell to the franchisor items that are notuniquely identified with the franchisor. This subdivision does not prohibit a provision thatgrants to a franchisor a right of first refusal to purchase the assets of a franchise on thesame terms and conditions as a bona fide third party willing and able to purchase thoseassets, nor does this subdivision prohibit a provision that grants the franchisor the right toacquire the assets of a franchise for the market or appraised value of such assets if thefranchisee has breached the lawful provisions of the Franchise Agreement and has failedto cure the breach in the manner provided in subdivision (c).(i)A provision which permits the franchisor to directly or indirectly convey, assign, orotherwise transfer its obligations to fulfill contractual obligations to the franchisee unlessprovision has been made for providing the required contractual services.THE FACT THAT THERE IS A NOTICE OF THIS OFFERING ON FILE WITH THEATTORNEY GENERAL DOES NOT CONSTITUTE APPROVAL, RECOMMENDATIONOR ENDORSEMENT BY THE ATTORNEY GENERAL.ANY QUESTIONS REGARDING THIS NOTICE SHOULD BE DIRECTED TO:OFFICE OF THE ATTORNEY GENERALCONSUMER PROTECTION DIVISION, FRANCHISE SECTION525 W. OTTAWA ST.G. MENNEN WILLIAMS BUILDING, FIRST FLOORLANSING, MICHIGAN 48933517-373-71172019 US TRU
TABLE OF CONTENTSItemPageITEM 1THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES . 1ITEM 2BUSINESS EXPERIENCE . 6ITEM 3LITIGATION . 10ITEM 4BANKRUPTCY . 14ITEM 5INITIAL FEES . 14ITEM 6OTHER FEES . 18ITEM 7ESTIMATED INITIAL INVESTMENT . 29ITEM 8RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES . 33ITEM 9FRANCHISEE'S OBLIGATIONS . 37ITEM 10FINANCING . 39ITEM 11FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING . 40ITEM 12TERRITORY . 52ITEM 13TRADEMARKS . 55ITEM 14PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION . 56ITEM 15OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISEBUSINESS . 58ITEM 16RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL . 59ITEM 17RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION . 61ITEM 18PUBLIC FIGURES . 68ITEM 19FINANCIAL PERFORMANCE REPRESENTATIONS . 69ITEM 20OUTLETS AND FRANCHISEE INFORMATION . 69ITEM 21FINANCIAL STATEMENTS . 74ITEM 22CONTRACTS. 74ITEM 23RECEIPTS . 75NOTICE OF TRADEMARK OWNERSHIPThe following trademarks used in this Disclosure Document are owned by our affiliates:Canopy Canopy by Hilton Conrad Curio DoubleTree DoubleTree by Hilton DoubleTree Suites by Hilton DoubleTree Club Hotel eforea Embassy Suites by Hilton Embassy Suites Hotels Hampton Hampton by Hilton Hampton Inn Hampton Inn by Hilton Hampton Inn & Suites Hampton Inn and Suites by Hilton Hilton Honors Hilton Hilton Garden Inn Hilton Inn iHilton Suites Hilton Supply Management Home2 Suites by Hilton Homewood Suites by Hilton LXR Motto by Hilton OnQ (formerly System 21 )Signia Hilton Tapestry Tru by Hilton Waldorf-Astoria 2019 US TRU
TABLE OF EXHIBITSExhibit AList of Franchised Hotels as of December 31, 2018Exhibit BList of Franchised Hotels Terminated, Canceled, Not Renewed or with Changes in ControllingInterest During 2018Exhibit CFinancial StatementsExhibit DFranchise Agreement and AddendumExhibit D-1State Addenda to Franchise AgreementExhibit D-2Development Incentive Promissory NoteExhibit EGuaranty of Franchise AgreementExhibit FFranchise ApplicationExhibit GInformation Technology System Agreement (HITS Agreement)Exhibit HManual Table of Contents – Brand StandardsExhibit IState Administrators and Agents for Service of ProcessExhibit JState Addenda to Disclosure DocumentExhibit KLender Comfort Letter FormsExhibit LReceiptsii2019 US TRU
ITEM 1THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATESAbout The Franchisor, Its Parents and Its PredecessorTo simplify the language in this Disclosure Document, “we” or “us” means Hilton FranchiseHolding LLC, the Franchisor. "You" means the person(s) who signs the franchise agreement, the“Franchisee.” If you are a business entity, "you" means both the business entity and its owners.The “Brand” refers to the name or names under which we will license your hotel. Our agent forservice of process in the states whose franchise laws require us to name an agent for service isshown on Exhibit I. Capitalized words not defined in this Disclosure Document have the meaningset forth in the Franchise Agreement.We are a Delaware limited liability company, formed in September 2007. Our principal businessaddress is 7930 Jones Branch Drive, Suite 1100, McLean, Virginia 22102 USA, and our telephonenumber is 703-883-1000.Our parent company is Hilton Domestic Operating Company Inc., a Delaware corporation formedon July 12, 2016 (“Hilton”). Hilton’s parent company is Hilton Worldwide Holdings Inc., aDelaware corporation formed on March 18, 2010 (NYSE: HLT) (“Hilton Worldwide”). Theprincipal business address of both companies is 7930 Jones Branch Drive, Suite 1100, McLean,Virginia 22102 USA.Hilton became our parent company on January 4, 2017, as the successor to our previous parentcompany, Park Hotels & Resorts, Inc. (“Park”). Together, Hilton and Park have conducted aguest lodging business since 1946. Park was originally called Hilton Hotels Corporation ("HHC")from May 29, 1946 to December 19, 2009. It changed its name to Hilton Worldwide, Inc. (“HWI”)on December 20, 2009, and to Park Hotels & Resorts Inc. on June 1, 2016. On January 4, 2017,Park became an independent company in a spin-off transaction. As a result of that spin-off,nearly all company-owned hotels were divested with Park. For convenience, all references to“Hilton” in this Disclosure Document include HHC, HWI, and Park during the relevant time framesfor each, unless otherwise noted.For purposes of this franchise offering, we do business under the name “Tru by Hilton.” Webecame the franchisor of hotels which operate under the Tru by Hilton Brand in the 50 states ofthe United States, its Territories and Possessions and the District of Columbia (“US”) onDecember 1, 2015.Our Other BrandsWe have been the franchisor in the US for the Canopy and Curio brand hotels since October 15,2014, the Conrad, DoubleTree, Embassy Suites, Hampton Inn/Hampton Inn & Suites, Hilton,Hilton Garden Inn, Home2 Suites, Homewood Suites, and Waldorf Astoria brand hotels sinceMarch 30, 2015, the Tapestry brand hotels since December 1, 2016, the LXR and the Motto brandhotels since September 1, 2018, and the Signia Hilton brand hotels since March 30, 2019, eachcurrently with “Collection” and/or “by Hilton” in their brand names as applicable. We offer each ofthese brands under a separate disclosure document. We also offer eforea spa franchises tofranchisees of Tapestry, Curio, DoubleTree, Embassy Suites and Hilton brand hotels, as anaddendum to the hotel franchise agreement under the disclosure documents for those brands.12019 US TRU
Our predecessors in the offer of these brands in the US include the following entities for thespecified brands:Brand OfferedCanopyConradCurioDoubleTreeEforea SpaEmbassy SuitesHampton Inn andHampton Inn & SuitesHiltonHilton Garden InnHome2 SuitesHomewood SuitesLXRMottoSignia HiltonTapestryTruWaldorf AstoriaPredecessor Franchisor EntityNoneConrad Franchise LLCHilton Inns, Inc.Hilton WorldwideDoubletree Franchise LLCDoubletree Hotel Systems, Inc.Doubletree Franchise LLCEmbassy Suites Franchise LLCHilton Franchise LLCEmbassy Suites Franchise LLCPromus Hotels, Inc.Hampton Inns Franchise LLCPromus Hotels, Inc.Hilton Franchise LLCHilton Inns, Inc.Hilton Garden Inns FranchiseLLCHilton Inns, Inc.HLT ESP Franchise LLCHomewood Suites Franchise LLCPromus Hotels, Inc.NoneNoneNoneNoneNoneWaldorf Astoria Franchise LLCHilton Inns, Inc.Dates OfferedN/AOctober 2007 to March 2015September 2007 to October 2007July 2, 2014 to October 14, 2014October 2007 to March 2015February 1989 to October 2007December 2011 to March 2015December 2011 to March 2015December 2011 to March 2015October 2007 to March 2015March 1984 to October 2007October 2007 to March 2015March 1983 to October 2007October 2007 to March 2015July 1962 to October 2007October 2007 to March 2015March 1990 to October 2007January 2009 to March 2015October 2007 to March 2015March 1988 to October 2007N/AN/AN/AN/AN/AOctober 2007 to March 2015January 2007 to October 2007Our Affiliates and Their PredecessorsWe currently have two affiliates that offer franchises outside of the US. First, Hilton WorldwideManage Limited, a limited company formed on December 7, 2010, under the laws of England andWales (“HWML”) has offered franchises outside the US since January 1, 2018, for the brandslisted below, except in Canada, China, Russia, and a limited number of other territories. Second,Hilton Worldwide Franchising LP, a limited partnership formed on March 12, 2014, under the lawsof England and Wales (“HWF”) offered franchises outside the US for the brands listed below fromJuly 1, 2014 to December 31, 2017, and currently continues to offer franchises for these brandsin Canada, China, Russia, and a limited number of other territories. Therefore, HWF is HWML’spredecessor outside of the US, except in Canada, China, Russia, and a limited number of otherterritories.The brands offered by HWML and HWF are: Conrad, Curio Collection by Hilton, DoubleTree byHilton, DoubleTree Suites by Hilton, Embassy Suites by Hilton, Hampton by Hilton, Hilton, HiltonGarden Inn, Home2 Suites by Hilton, Homewood Suites by Hilton and Waldorf Astoria, Canopyby Hilton (since first offered on October 15, 2014), Tru by Hilton (since first offered on June 30,22019 US TRU
2016), Tapestry Collection by Hilton (since first offered on December 1, 2016), LXR (since firstoffered on July 1, 2018), and Motto and Signia Hilton (may be offered beginning in 2019).HWML and HWF have the same principal business address at Maple Court, Central Park, ReedsCrescent, Watford, Hertfordshire WD24 4QQ UK and telephone number 44 207 856 8000.HWF’s predecessors for the offer of
FRANCHISE DISCLOSURE DOCUMENT Hilton Franchise Holding LLC a Delaware limited liability company 7930 Jones Branch Drive, Suite 1100 McLean, Virginia 22102 703-883-1000 . Exhibit D-1 State Addenda to Franchise Ag
