Graduate by Hilton Franchise Cost, Revenue & Review 2026
Data from FDD filing
Analysis by FranchiseVerdict Research · Methodology
Graduate by Hilton is a boutique hotel franchise with playful, locally themed properties in college and university towns. Franchisees own and operate the hotels, managing guest services, food and beverage, and brand standards.
FranchiseVerdict summary · 2026
A Graduate by Hilton franchise does not disclose total investment in its current FDD, including a $100K franchise fee and an ongoing 5.0% royalty[2]. The 2026 FDD does not disclose unit-level revenue (no Item 19). FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- $19.0M
- 58th pct Lodging
- Avg gross sales
- N/A
- Royalty
- 5.0%
- 3rd pct Lodging
- Units
- 33
- 35th pct Lodging
- SBA charge-off
- N/A
Quick verdict · Lodging · color = vs category peers
Green = favorable by >10% vs Lodging avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $19.0M including a $100K franchise fee, 5.0% ongoing royalty.
- RETURNSAudited consolidated financials of franchisor Hilton Franchise Holding LLC (in thousands). FY2025 total revenues $1,560,067K comprised franchise royalty fees $1,502,299K, franchise sales/change-of-ownership fees $52,254K, and franchise termination fees and other $5,514K. Figures reflect the entire Hilton Franchise Holding LLC system (all Hilton brands), not the Graduate brand alone.
- RISKVerdict B (Above average), verdict score 54/100 (higher is better).
- LEGAL10 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
Corporate structure & franchisor financials
- Legal entity
- Hilton Franchise Holding LLC
- Parent company
- Hilton Domestic Operating Company Inc.
- Ultimate parent
- Hilton Worldwide Holdings Inc.
- Predecessor
- Graduate IP LLC
- Prior franchisor entity
- CEO title
- Chief Executive Officer and President
- Christopher J. Nassetta
- CEO experience
- 2013 yrs
- Years in role or industry
- Incorporated in
- DE
- HQ
- 7930 Jones Branch Drive, Suite 1100, McLean, Virginia 22102
- Auditor
- CBH (Tysons Corner, Virginia)
- Audited financials
- Franchisor revenue
- $1.6B
- vs $1.5B prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
- CEO
- Christopher J. Nassetta
- Headquarters
- VA
- Founded
- 2007
- FDD year
- 2026
- States available
- 20
Can you afford it, and what does the money buy?
Source: FDD 2026 · Items 5–7
Full Item 7 breakdown24 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Franchise Application Fee | $100K | $100K | |
| Property Improvement Plan | $0 | $10K | |
| Market Study | — | — | |
| Environmental Assessment | — | — | |
| Real Property | — | — | |
| Construction and Leasehold Improvements | $11.6M | $68.3M | |
| Designer & Engineering Fees | $466K | $2.7M | |
| Furniture, Fixtures & Equipment | $2.2M | $7.8M | |
| Inventory & Operating Equipment | $1.5M | $2.5M | |
| Signage | $64K | $165K | |
| Computer Hardware and Software Systems | $107K | $262K | |
| Guest Internet Access System | $72K | $105K | |
| Connected Room System | $35K | $42K | |
| Delphi Sales and Events System | $990 | $41K | |
| Required Pre-Opening Training | $5K | $15K | |
| ADA Consultant Fee | $6K | $15K | |
| Construction/Renovation Extension Fee | $0 | $10K | |
| Insurance | — | — | |
| Organizational Expense | $75K | $318K | |
| Permits & Licenses | $175K | $1.0M | |
| Total initial investment | $19.0M | $93.7M |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $19.0M
- Middle of category vs category
- Liquid capital req'd
- $1.0M – $1.4M
- Middle of category vs category
- Franchise fee
- $100K – $100K
- Middle of category vs category
- Royalty
- 5.0%
- percentage · typical 6–8%
- Ad fund
- 4.0%
- typical 3–5%
- Total fee load
- 9.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 4.0% of gross sales |
| Technology fee | $400 |
| Training fee | $5K |
| Transfer fee | $150K |
| Inventory (initial) | $1.5M – $2.5M |
| Total fee load | 9.0% of rev |
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
Graduate by Hilton did not disclose financial performance in FDD Item 19. The ROIC and return models require Item 19 revenue. Without it all inputs are estimates. You can still run the calculator with your own assumptions by entering an expected revenue figure.
Returns model · single-unit ROIC
What would one Graduate by Hilton unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
0%
Below the 30–60% attractive-franchise band
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2026 FDD
Financial Performance
Audited consolidated financials of franchisor Hilton Franchise Holding LLC (in thousands). FY2025 total revenues $1,560,067K comprised franchise royalty fees $1,502,299K, franchise sales/change-of-ownership fees $52,254K, and franchise termination fees and other $5,514K. Figures reflect the entire Hilton Franchise Holding LLC system (all Hilton brands), not the Graduate brand alone.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Fee burden
Total ongoing fee load of 9.0% (near the Lodging average).
Disclosure
Franchisor chose not to disclose financial performance representations. You will need to gather unit economics directly from existing franchisees.
Operator retention
Net unit growth of +3.1% over 3 years (1 opened, 0 closed).
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Lodging averages
How Graduate by Hilton Compares
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 33
- Opened
- 1
- Last reporting year
- Closed
- 0
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 0.0%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- +3.1%
- Net unit change over 3 years
3-year detail · Item 20
- Opened (3yr)
- 32
- Closed (3yr)
- 0
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
- Transfer rate
- 3.0%
- Owners selling to other franchisees
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 20 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
20
states with franchisees (per FDD Item 12)
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
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.
Litigation (Item 3)
Pending: Bow Hospitality (RI, breach of contract - Hampton termination); In re Extended Stay Hotel Antitrust Litigation (N.D. Cal., Sherman Act class action); Hanson Dai v. SAS Institute (N.D. Cal., Sherman Act class action); Ryan Segal v. Amadeus IT Group (N.D. Ill., Sherman Act class action); Jeanette Portillo v. CoStar Group (W.D. Wash., Sherman Act class action). Concluded: AAAA Property Partners (M.D. Fla., settled 2025); State of Texas v. Hilton (settled 2025, $2.1M); State of Nebraska v. Hilton (settled 2024, $300K); Hilton Franchise Holding LLC v. Portland Hotel Ownership (settled 2022); San Pedro Inn v. Hilton Franchise Holding (settled 2020). Collection suits in 2025: ML Plaza Owner (VA), Unique Crowne Hospitality (E.D. Va.), Empower Metro Center (VA). Also historical: U.S. v. Hilton Hotels Corporation (1970 Sherman Act, consent decree).
Largest disclosed settlement: $2,100,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · CBH (Tysons Corner, Virginia)
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 54 / 100 verdict
- 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
What are you signing up for?
Ongoing fees run about 9.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 23 years |
|---|---|
| Allowed renewalsℹ | 0 |
| Territory type | none |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rights | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Right of first refusalℹ | No |
| Transfer requires consent | Yes |
| Termination notice | 10 days |
| Curable defaultsℹ | 4 |
| Mandatory arbitration | No |
| Arbitration location | Virginia / New York |
| Jury trial waiver | Yes |
| Governing law | NY |
| Litigation count | 10 |
View Item 3 litigation summary
Pending: Bow Hospitality (RI, breach of contract - Hampton termination); In re Extended Stay Hotel Antitrust Litigation (N.D. Cal., Sherman Act class action); Hanson Dai v. SAS Institute (N.D. Cal., Sherman Act class action); Ryan Segal v. Amadeus IT Group (N.D. Ill., Sherman Act class action); Jeanette Portillo v. CoStar Group (W.D. Wash., Sherman Act class action). Concluded: AAAA Property Partners (M.D. Fla., settled 2025); State of Texas v. Hilton (settled 2025, $2.1M); State of Nebraska v. Hilton (settled 2024, $300K); Hilton Franchise Holding LLC v. Portland Hotel Ownership (settled 2022); San Pedro Inn v. Hilton Franchise Holding (settled 2020). Collection suits in 2025: ML Plaza Owner (VA), Unique Crowne Hospitality (E.D. Va.), Empower Metro Center (VA). Also historical: U.S. v. Hilton Hotels Corporation (1970 Sherman Act, consent decree).
Items 10, 11
Training & Operations
- Classroom training
- 18 hrs
- On-the-job training
- 1 hrs
- Training location
- Virtual / Online / On-site
- Ongoing training
- Required
- Site selection
- Franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- OnQ
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: OnQ
Item 20 · call current owners
Franchisee Contacts
2 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Graduate by Hilton · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
What do Graduate by Hilton franchise owners earn?
Graduate by Hilton does not disclose average franchise owner earnings in their FDD Item 19. Not all franchisors are required to make financial performance representations. We recommend asking existing franchisees directly about their financial experience.
What is Item 19 in the Graduate by Hilton FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Graduate by Hilton FDD and qualifies whose outlets they describe.
What is Graduate by Hilton's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Graduate by Hilton (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Graduate by Hilton franchise locations are there?
As of their most recent FDD filing, Graduate by Hilton has 33 total units in the United States, including 33 franchised units and 0 company-owned units. 1 new units were opened in the latest reporting year.
Is Graduate by Hilton a good franchise to buy?
FranchiseVerdict rates Graduate by Hilton as a B-grade franchise with a verdict score of 54 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
Are you the franchisor?
If you represent Graduate by Hilton, you can request corrections or provide updated information.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.