Undergraduate by HiltonFranchise Cost, Revenue & Review 2026
Data from FDD filing
FranchiseVerdict summary · 2026
A Undergraduate by Hilton franchise requires a total initial investment of $10.6M – $36.6M, including a $100K franchise fee and an ongoing 5.0% royalty[2]. The 2026 FDD does not disclose unit-level revenue (no Item 19). Verdict grade: C. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2026 FDD issuance
Overview
- Investment
- $10.6M – $36.6M
- 39th pct Lodging
- Avg gross sales
- N/A
- 2nd pct Lodging
- Royalty
- 5.0%
- 4th pct Lodging
- Units
- 0
- 0th pct Lodging
- SBA default
- N/A
Quick verdict · Lodging · color = vs category peers
Green = >15% above Lodging avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Started franchising in 2026. Newer systems carry more uncertainty but may offer better territories.
15 legal cases disclosed in the FDD. Read Item 3 before signing.
Bottom line
- Total investment $10.6M – $36.6M including a $100K franchise fee, 5.0% ongoing royalty.
- No Item 19 financial performance data disclosed. The franchisor chose not to publish revenue figures.
- Verdict C (Average) with a risk score of 65/100.
- 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
- Legal entity
- Hilton Franchise Holding LLC
- Parent company
- Hilton Domestic Operating Company Inc.
- Ultimate parent
- Hilton Worldwide Holdings Inc.
- CEO title
- Chief Executive Officer and President
- Christopher J. Nassetta
- Incorporated in
- DE
- HQ
- 7930 Jones Branch Drive, Suite 1100, McLean, Virginia 22102
- Auditor
- Cherry Bekaert LLP
- Audited financials
- Franchisor revenue
- $1.6B
- vs $1.5B prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
Franchisees operate extended-stay hotel properties branded under Hilton's budget segment, managing day-to-day guest services, housekeeping, front desk operations, and maintenance while paying Hilton 5% royalties on gross room revenue. Franchisees are responsible for all capital investment, staffing, local marketing, and compliance with Hilton standards across a 22-year agreement.
- CEO
- Christopher J. Nassetta
- Headquarters
- VA
- Founded
- 2007
- FDD year
- 2026
- States available
- 0
FDD Item 7 · 2026 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $100K | $100K |
| Working capital (3–6 mo) | $400K | $1.0M |
| Equipment, build-out, other | $10.1M | $35.5M |
| Total initial investment | $10.6M | $36.6M |
Source: Undergraduate by Hilton 2026 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $10.6M – $36.6M
- Better than avg vs category
- Liquid capital req'd
- $400K – $1.0M
- Better than avg vs category
- Franchise fee
- $100K – $100K
- Near category avg vs category
- Royalty
- 5.0%
- Gross Rooms Revenue · 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 |
| Training fee | $15K |
| Transfer fee | $150K |
| Total fee load | 9.0% of rev |
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
vs Lodging averages
How Undergraduate by Hilton Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 0
- Opened
- 0
- Last reporting year
- Closed
- 0
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Company-owned
- 0
- Corporate units in the system
3-year detail · Item 20
- Transfers (3yr)
- 0
- Projected new
- 3
- Franchisor's next-year forecast
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 contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
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.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Undergraduate by Hilton presents extreme risk: zero operating units, going concern status, active antitrust litigation, prior regulatory settlements, franchisor collection actions, and no financial performance data — positioning this as an unproven concept with a financially compromised parent company.
Litigation (Item 3)
Hilton Franchise Holding LLC is defendant in one franchisee dispute and two antitrust class actions
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Cherry Bekaert LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 65 / 100 rating
- 01HIGHGoing concern status is FALSE — indicates potential solvency/viability crisis at franchisor level
- 02MINORZero operating units with unknown growth trajectory suggests brand has not launched or has failed to attract franchisees
- 03HIGHFive pending litigation actions including class action antitrust suit creates systemic legal and reputational risk
- 04MINORPrior settlements with Texas and Nebraska over mandatory fee disclosure suggests regulatory compliance issues and consumer trust problems
- 05MINORFranchisor initiated four collection suits in 2025 — indicates franchisee default/payment failures and cash flow stress
- 06MEDNo average revenue or net income disclosure (missing Item 19) prevents ROI validation and suggests poor unit economics
- 07MINORUnprotected territory creates direct cannibalization risk and eliminates competitive moat
- 08MINORExtremely wide investment range ($10.6M–$36.6M) with no unit count indicates undefined business model and unclear capital requirements
- 09MINOR22-year term locks franchisees into relationship with financially distressed franchisor
- 10MINORHilton brand extension into budget segment may signal market weakness or strategic pivot under duress
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 22 years |
|---|---|
| Allowed renewalsℹ | 0 |
| Territory type | Restricted Area |
| 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 | 30 days |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | New York |
| Litigation count | 15 |
View Item 3 litigation summary
Hilton Franchise Holding LLC is defendant in one franchisee dispute and two antitrust class actions
Items 10, 11
Training & Operations
- Classroom training
- 105 hrs
- On-the-job training
- 1 hrs
- Training location
- On-site and at franchisor facility
- Ongoing training
- Required
- POS system
- OnQ
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: OnQ
Item 20 · call current owners
Franchisee Contacts
15 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Undergraduate by Hilton · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Undergraduate by Hilton franchise?
The total investment to open a Undergraduate by Hilton franchise ranges from $10.6M – $36.6M, with an initial franchise fee of $100K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Undergraduate by Hilton franchise owners earn?
Undergraduate 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 Undergraduate by Hilton's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Undergraduate 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.
Is Undergraduate by Hilton a good franchise to buy?
FranchiseVerdict rates Undergraduate by Hilton as a C-grade franchise with a risk score of 65 out of 100, 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.
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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.