$271

Business Description

We are a Delaware limited liability company, formed in September 2007. For purposes of this franchise offering, we do business under the names “Hampton Inns,” “Hampton Inn,” “Hampton Inn & Suites,” “Hampton Inn by Hilton” and “Hampton Inn & Suites by Hilton.” Our principal business address is 7930 Jones Branch Drive, Suite 1100, McLean, Virginia 22102, and our telephone number is 703-883-1000. We became the franchisor of hotels which will operate under the Hampton Brands in the 50 states of the United States of America, its Territories and Possession and the District of Columbia (“US”) on March 30, 2015.

Prior Experience

Our parent company is Hilton Domestic Operating Company Inc., a Delaware corporation formed on July 12, 2016 (“Hilton”). Hilton’s parent company is Hilton Worldwide Holdings Inc., a Delaware corporation formed on March 18, 2010 (NYSE: HLT) (“Hilton Worldwide”). The principal 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 parent company, Park Hotels & Resorts, Inc. (“Park”). Together, Hilton and Park have conducted a guest 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 frames for each, unless otherwise noted. Our immediate predecessor in offering the Hampton Brand in the US was our subsidiary, Hampton Inns Franchise LLC, a Delaware limited liability company formed in September 2007 (”HIF”). HIF offered franchises for the Hampton Brands from October 2007 through March 2015. HIF’s predecessor was Promus Hotel Systems, Inc., a Delaware corporation incorporated in May 1995 (“Promus”). Promus licensed, owned and operated Hampton Inn & Suites hotels between May 1995 and October 2007. Hampton Inn hotels were first franchised by a predecessor of Promus in 1983. Hampton Inn & Suites hotels were first franchised by a predecessor of Promus in 1993. Hilton acquired Promus’s indirect corporate parent on December 1, 1999, and became the ultimate parent corporation of Promus and all its affiliates. We have also been the franchisor in the US for Canopy and Curio – a Collection by Hilton brand hotels since October 15, 2014, each offered under a separate disclosure document. We have also been the franchisor in the US for Conrad, DoubleTree, Embassy Suites, Hilton, Hilton Garden Inn, Home2 Suites by Hilton, Homewood Suites by Hilton and Waldorf Astoria brand hotels since March 30, 2015, each offered under a separate disclosure document. We have also been the franchisor for Tru by Hilton brand hotels in the US since December 1, 2015, and for the Tapestry Collection by Hilton brand hotels in the US since December 1, 2016, each under a separate disclosure document. We also offer eforea spa franchises in the US to franchisees of Tapestry, Curio, DoubleTree, Embassy Suites and Hilton band hotels, as an addendum to the hotel franchise agreement under the disclosure documents for those brands.

Business Offered

We and our affiliates engage in a wide range of business activities in lodging and related services, both directly and through the activities of our and their parents and affiliates. Some of these activities may be competitive with your Hotel and the System. We and/or our affiliates may own, operate, franchise, license, acquire, create or establish, or serve as franchisee or licensee for, competitive guest lodging facilities or networks anywhere, including within your Restricted Area, if any, under any brands or marks (but not, within your Restricted Area, if any, under the Hampton Brand). We and/or our affiliates may also furnish services, products, advice and support to guest lodging facilities, networks, properties or concepts located anywhere, including within your Restricted Area, if any, in any manner that we or our affiliates determine. We and/or any of our affiliates may be sold to or otherwise acquired by an existing competitor or newly formed entity which itself has established or may establish competitive guest lodging facilities located anywhere (provided that your Restricted Area protections, if any, will be observed). Further, we and/or our affiliates may purchase, merge, acquire, or affiliate in any other way with any franchised or non-franchised network or chain of guest lodging facilities or any other business operating guest lodging facilities regardless of the location of that network, chain or other business’s facilities, including within your Restricted Area, if any, and that following such activity we may operate, franchise or license those other facilities under any Brands or marks anywhere regardless of the location of those businesses and/or facilities. There is no mechanism for resolving any conflicts that may arise between your hotel and other hotels described in this paragraph.

Initial Fees

Franchise Application Fee All prospective franchisees must complete an Application for a System Hotel, whether for New Development, Conversion, Change of Ownership, or a Re-licensing situation. The current form Application is attached as Exhibit F. When you submit the Application to us for processing, you must also pay a Franchise Application Fee (“Franchise Application Fee”). The Franchise Application Fee for a New Development or Conversion is $75,000 plus $400 for each additional Guest Room over 150. If you increase the proposed number of Guest Rooms for the hotel after your Application is approved but before the hotel opens under the Brand, you must obtain our approval and pay any additional Franchise Application Fee owed. The Franchise Application Fee for a Re-licensing to the same owner is $75,000. The Franchise Application Fee for a Change of Ownership is $175,000. Once we approve your Application, the Franchise Application Fee is non-refundable except as described in this Item 5. You must provide all the information we ask for in your Application. If we approve your Application before you supply all of the information, our approval will be conditioned on receiving the rest of the information within the time we specify. If you fail to provide the rest of the information within the specified time, we may terminate our offer. If we approve your Application subject to certain requirements, we may terminate our offer if you fail to meet those requirements. If we terminate our offer, we will not refund the Franchise Application Fee. If you withdraw your Application before we approve it, or if we deny your Application, we will refund the Franchise Application Fee, without interest, less a $7,500 processing fee, which may be waived or reduced at our discretion. If your Application is for a Change of Ownership but the Change of Ownership does not occur, we will refund your Franchise Application Fee, without interest and less a $7,500 processing fee. Under unique circumstances, we and our predecessor have occasionally agreed to give full or partial refunds or to credit the Franchise Application Fee toward the Franchise Application Fee of another application for the Brand if submitted and approved within 6 months or less. We are not obligated to do either. We may occasionally elect to reduce the Franchise Application Fee after considering criteria which may include: incentives for the development of hotels within the System, a hotel’s market position, the property size and the number of hotels in the System operated by a franchisee. We may occasionally negotiate the Franchise Application Fee for franchisees with whom we or our predecessor have previously dealt or in other unique circumstances. We are not obligated to reduce or negotiate the Franchise Application, even if you possess some or all of these characteristics. In 2017, franchisees paid Franchise Application Fees ranging from $50,000 to $81,000 for a New Development or Conversion; from $0 to $175,000 for Re-licensing or Change of Ownership. If you are applying for a franchise for a hotel that was previously operated as a System Hotel, we may require, as a condition of approving your Application, that you pay outstanding royalties and other fees due under the prior franchise agreement relating to the System Hotel In addition to the Franchise Application Fee. Product Improvement Plan If you want to convert an existing hotel to a Hampton Brand hotel or apply for a Change of Ownership or other Re-licensing of an existing Hampton Brand hotel, we charge an additional non-refundable fee of $7,500 to prepare the product improvement plan (“PIP”) for the hotel. You must pay the PIP fee before we schedule the PIP inspection. In some circumstances, we may waive the PIP fee or apply the PIP fee towards the payment of your Franchise Application Fee, but we are not obligated to do so. If the hotel is under a PIP, you must participate in the Foundation Model of Revenue Management Consolidated Center (“RMCC”) and pay the associated fee. Construction Extension Fee You must start construction at your hotel by the Construction Commencement Date (“CCD”) specified on the Addendum to your Franchise Agreement. The CCD under a Franchise Agreement for New Development is 15 months from the date we approve your Application. We establish CCDs for Conversions as well as for work on room additions on a project-by-project basis. Under the Franchise Agreement, your CCD will be extended by 30 days on a rolling basis without a fee unless we provide at least 60 days’ notice to you that these automatic extensions will end. At that point, if you wish to request any further extension, you must submit a written request before the CCD, describing the status of the project and the reason for the requested extension. If we approve the extension, you must pay a $10,000 extension fee, and we will set the new CCD and project milestone dates. Renovation Work Completion Fee If you are converting your hotel, you must complete the renovation by the date specified as the renovation work completion date (“RWCD”) on the Addendum to your Franchise Agreement. Under the Franchise Agreement, your RWCD will be extended by 30 days on a rolling basis without a fee unless we provide at least 60 days’ notice to you that these automatic extensions will end. At that point, if you wish to request any further extension, you must submit a written request before the RWCD describing the status of the project and the reason for the requested extension. If we approve the extension, you must pay a $10,000 extension fee, and we will set the new RWCD and project milestone dates. Computer System Fees You must use our required business computer system, which we may periodically change. Currently, we require you to use “OnQ?,” which connects System Hotels to Hilton’s reservation offices and travel planners worldwide. OnQ is comprised of proprietary components for reservations, property management, revenue management, rate & inventory management, forecast management, learning management, and other components for the operation of the Hotel. The complete OnQ package currently includes hardware, software, installation, and support. A portion of your Monthly Program Fee pays for the required standard hardware for OnQ. This hardware will be supplied by preferred providers, installed by our affiliate, HSS, and maintained by HSS or its agents. You must license the OnQ software from HSS because it is proprietary. You must pay HSS for the software, installation and configuration charges about 45 days before your hotel opens. We estimate that this will cost between $34,000 and $79,000, based on the size of the hotel and number of workstations. As an alternative, you may purchase or lease the required hardware from another (non-preferred) third party vendor, but if you do you must pay for the cost of the hardware in addition to the Monthly Program Fee you pay to us, and you must pay HSS for its reasonable expenses in determining that the hardware conforms to our specifications. These computer system fees are not refundable. You must update and upgrade (“refresh”) the OnQ system at least every 3 years. We may also require you to refresh the OnQ system in connection with a Change of Ownership or Relicensing, when a new franchise agreement is signed. We anticipate that cost of this to be the same or less than the cost of the original installations (but not including any elements that were needed for the original installation only). You must pay $1,000 for the preparation of a digital floor plan for your hotel. HSS will have the digital floor plan prepared by a local vendor. The floor plan will be used by us and our affiliates, including Hilton Honors Worldwide, to allow Hilton Honors guests to choose their room from a map of the hotel and enable digital check-in. This fee is paid to HSS before the opening of your hotel, and is not refundable. The costs shown above do not include certain costs payable to third parties in connection with the OnQ system. They also do not include costs payable to third parties in connection with our required Guest Internet Access system, or the costs of optional computer system components that we may recommend. All computer system costs are subject to change, and normally are not refundable. See Item 11 for a more detailed description of our required and recommended computer systems. Training Program Fees We provide required training programs that your general manager and/or other key personnel must complete before certification for opening a new Hampton Brand hotel. This training is required for new as well as existing hotels. We may charge you for the training services and materials. As of the date of this Disclosure Document, these costs range from $5,000 to $15,000. You must also bear the cost of wages, travel, lodging and other expenses of your general manager and any other trainees. Training program fees are not refundable. Opening Procurement Services If we or our affiliates furnish, supply, service or equip your hotel at your request before it opens, then you must pay or reimburse us or them for all costs incurred at your request, and related service fees. In particular, HSM manages and distributes hotel furniture, furnishings, fixtures, equipment and supplies, and certain food and beverage equipment supplies at a discount. We recommend you purchase these items from HSM, as we specify, but you are not obligated to do so. If you choose to buy from HSM, it will invoice you for the cost of the products, plus freight, sales tax and other actual costs, plus a procurement fee that ranges 4% to 10% of the project cost. HSM may offer you a payment plan. These payment plans are agreed with each franchisee individually based on the type of project. Currently, HSM offers franchisees the ability to pay the project costs in 5 installments as follows: first – 5%, second – 5%, third – 10%, fourth – 45%, and fifth – 35% of the total. These percentages may be adjusted based on the project’s timeline. Payment dates are also based on the project’s timeline. Payments are due in 30 days. The interest rate for late payments is 18.5% per year, compounded daily. Change orders must be paid in full, either in advance or with the next installment due. Miscellaneous Services We, our parents and/or our affiliates may periodically offer you additional services. These could include additional training for you and your employees, assistance in recruiting various types of employees, and other services and programs. Most of these services and programs will be optional, but some, including systems upgrades and changes in System standards, which may require additional mandatory training or participation in additional programs, may be mandatory.

Financing

Other than the development incentive program (“incentive”) described in this Item, we generally do not offer direct or indirect financing for franchisees. We may negotiate these incentives when business circumstances warrant. The incentive program may be modified, limited, extended or terminated at any time without advance notice or amendment of this Disclosure Document. We generally require payment of the Franchise Application Fee in a lump sum when you submit your Application. We occasionally allow payment of the Franchise Application Fee in installments over a limited time period before the start of construction work on the hotel. If we do, we will not charge interest or require a security interest over the installment period or require you to sign a note. You may prepay the unpaid amount of the Franchise Application Fee at any time. If there is a default under the Franchise Agreement, the outstanding balance is accelerated and become your immediate obligation, along with any court costs and attorney’s fees for collection. We may offer, in our sole discretion, certain incentives for development and conversion hotels. The incentive is a loan that is not subject to repayment unless the franchise terminates before the end of the Term (generally the first 20 years of operation of the hotel) or a transfer occurs. If a transfer occurs, you will repay the balance of the incentive. At each anniversary of the Hotel Opening Date, the repayable amount of the incentive reduces by 1/20th of the original amount. To receive the incentive, you and your principals, as co–makers, must sign a development incentive note (“Note”) in the form attached as Exhibit D-2 when you sign the Franchise Agreement. Any incentive will be disbursed to you after: (i) you have passed a final credit/financial review with no material adverse changes in the business, legal, litigation, bankruptcy status or finances of the applicant, the guarantors or the project since preliminary approval; (ii) the hotel opens with our consent; (iii) you have completed any PIP required by the Franchise Agreement; and (iv) you have paid the Franchise Application Fee. The Note bears no interest except in the case of default. We may grant renewals, extensions, modifications, compositions, compromises, releases or discharges of other parties without notice to any guarantor or co-maker. If you transfer the hotel, you must repay the balance of the Note unless the Transferee and its principals assume the obligation to repay the incentive and provide us with such other security as we may require in our sole discretion. If you are purchasing an existing hotel and you assume the obligation to repay the unamortized balance of the Note with our consent, you must repay the balance if the franchise terminates after your purchase of the hotel. We generally do not offer any other financing or guarantee any note, lease, or other obligations. However, in unique or rare circumstances we may choose to offer other types of financing such as, for example, a mezzanine loan or a guaranty of your note, lease, or other obligations. In that event, the arrangements we offer would be based on the unique circumstances and financial situation of your Hotel. As a result, we cannot determine in advance the key terms such as, for example, the amount, term, repayment obligations, interest, fees, costs, penalties, security interests, default provisions, and other conditions or requirements. We also cannot determine in advance the type of documentation that would be required such as, for example, notes, guarantees, security agreements, mortgages, deeds, assignments, equity pledges, credit letters, intercreditor agreements, or other instruments. We do not have sample forms of these types of documents. These documents and each of their terms would be agreed at the time of origination.

Franchisee Revenue and Profit

The charts below set forth certain historic performance information for Hampton Brand hotels operating in the United States (but not its Territories or Possessions) (“US”). In this Item 19, the term “Company-Managed" refers to hotels owned and/or managed by Hilton Worldwide or its affiliates, including franchised hotels. “Franchisee-Managed” refers to hotels that are franchised and are managed by the franchisee or a non-Hilton Worldwide management company retained by the franchisee. “Comparable Hotels” means those that: (i) were active and operating in our system for at least one full calendar year as of the end of the current period, and open January 1st of the previous year; (ii) have not undergone a change in brand or ownership type during the current or comparable periods reported; and (iii) have not sustained substantial property damage, business interruption, undergone large-scale capital projects or for which comparable results are not available. As of December 31, 2017, there were 1,269 Hampton Inn branded hotels operating in the US. Of these, 994 were classified as Comparable Hotels. Of the Comparable Hotels, 36 were CompanyManaged and 958 were Franchisee-Managed. As of December 31, 2017, there were 875 Hampton Inn & Suites branded hotels operating in the US. Of these, 695 were classified as Comparable Hotels. Of the Comparable Hotels, 7 were Company-Managed and 688 were Franchisee-Managed. As of December 31, 2017, combining Hampton Inn and Hampton Inn & Suites, there were 2,144 Hampton branded hotels operating in the US. Of these, 1,689 were classified as Comparable Hotels. Of the Comparable Hotels, 43 were Company-Managed and 1,646 were Franchisee-Managed. The financial performance results detailed in this section for 2016 and 2017 are for the 2017 Comparable Hotels, defined above to provide a year-over-year comparison. The following charts show Average Room Rate and Average Occupancy for Comparable Hotels and the number and percentage of Company-Managed and Franchisee-Managed Comparable Hotels that met or exceeded the average. Average Room Rate and Average Occupancy are calculated based on information routinely reported to Hilton Worldwide by individual System hotels. YOUR FINANCIAL RESULTS ARE LIKELY TO VARY FROM THE RESULTS STATED IN THE FINANCIAL PERFORMANCE REPRESENTATION, EVEN IF YOU ARE PURCHASING A MATURE HOTEL, AND THE DIFFERENCES MAY BE MATERIAL. You are strongly advised to perform an independent investigation of this opportunity to determine whether or not the franchise may be profitable and to consult your attorney, accountant, and other professional advisors before entering into any agreement with us. You should conduct an independent investigation of the occupancy rates and room rates you will achieve. Our current and former franchisees may be one source of this information. You should construct your own business plan and pro forma cash flow statement, balance sheet, and statement of operations, and make your own financial projections regarding sales, revenues, costs, customer base, and business development for your hotel. You should obtain, from a firm with satisfactory experience in appraising and evaluating hotel operations, an independent market study containing projections for sales, costs, income and profits. Actual results vary between hotels, and we expect that they will vary from franchisee to franchisee. Your results will be affected by a variety of factors including the following: the nature and extent of your competition; whether competitive hotels in your market are affiliated with any chains or other centralized reservation systems; the age and established customer base of competitive hotels; the inroom and common area facilities and amenities of your hotel versus competitive hotels; whether your geographic area has a greater or lesser demand for hotel accommodations, which can turn on a number of factors; the frequency of business travel to/from your geographic area; whether your hotel is situated at or near an airport; whether your hotel is situated close to or remote from a central business district; whether your hotel is situated in a geographic area that attracts vacation travelers; the type of hotel you operate – resort, full-service, limited service, all suites or rooms only; whether your hotel offers food, beverage and/or convention and meeting services; whether your hotel is situated near a college, resort attraction, theme park or other institution that generates lodging demand; the length of time your hotel has been open to the public; and the length of time your hotel has been affiliated with us. Other than the preceding financial performance representation, we do not make any financial performance representations. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to our management by contacting William Fortier, 7930 Jones Branch Drive, Suite 1100, McLean, Virginia 22102, 703- 883-1000, the Federal Trade Commission, and the appropriate state regulatory agencies. We will make available to you on reasonable request written substantiation for the above financial performance representations, but we are under no obligation to disclose to you specific information about a particular hotel.