Bottom line
- Total investment $19.0M including a $100K franchise fee, 5.0% ongoing royalty.
- No Item 19 financial performance data disclosed — the franchisor chose not to publish revenue figures.
- Rated MODERATE with a risk score of 64/100.
- 15 litigation matters disclosed in Item 3 — higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Graduate by Hilton unit return on the cash you put in?
Unlevered ROIC · per unit
0%
Below typical band (30–60%)
Overview
About
Franchisees develop and operate upscale, boutique-style hotels under the Graduate by Hilton brand, typically 100-150 rooms targeting millennial and Gen-X travelers. Daily operations include guest services, housekeeping, food/beverage management, and revenue optimization, with significant compliance exposure to franchisor software systems and guest fee disclosure policies that have been subject to legal challenge.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 13 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Graduate by Hilton presents CAUTION-to-HIGH RISK due to massive capital requirements without financial transparency, stagnant unit growth, active litigation around revenue practices, and unprotected territory in a competitive upscale hotel segment.
Score breakdown · what drove the 64 / 100 rating
- 01MEDExtremely high capital investment ($18.9M+) with no disclosed average revenue or net income—impossible to calculate ROI
- 02MEDMinimal system growth (3.1% YoY) with only 33 units suggests weak franchise model appeal and limited brand momentum
- 03MINORMultiple pending antitrust lawsuits regarding revenue management software and data sharing create operational and financial liability exposure
- 04HIGHHistory of concluded litigation over deceptive guest fee practices and franchise termination disputes indicates systemic franchisee-franchisor conflict
- 05MINORNo protected territory despite massive investment and 23-year commitment creates risk of same-brand cannibalization
- 06MINOR5% royalty on gross rooms revenue (not net) is punitive during low-occupancy periods and reduces franchisee flexibility
- 07MINORAbsence of Item 19 financial performance disclosure prevents validation of unit economics and profitability claims
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
15 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Graduate by Hilton · FDD (2026) PDF