Hotel franchise accounting Accounting for Marriott franchisees. Fees on gross room sales, with no reduction for card fees.
Marriott franchise agreements charge a franchise fee and a program services contribution on gross room sales. Fairfield by Marriott’s 2024 disclosure sets 5.5% plus 3.85% — including a 2.5% marketing fund — plus $7,000 a year and $135 per room, due by the 15th of the following month, and defines gross room sales with no reduction for chargebacks or card fees. Kite keeps those rules for Marriott operators.
Operators of this brand run their back office on Kite
What the Marriott agreement charges
| Fee | Amount | Charged on | When |
|---|---|---|---|
| Fairfield — franchise fee | 5.5%[1] | Gross room sales | By the 15th of the following month |
| Fairfield — program services | 3.85% + $7,000/yr + $135/room/yr[1] | Gross room sales (includes 2.5% marketing fund) | By the 15th of the following month |
| Residence Inn (16 properties) | 5.0–6.0% + 2.5%[2] | Royalty + marketing, gross room revenue | Per the agreement |
| Courtyard (3 properties) | 5.5–6.0% + 2.0–2.5%[2] | Royalty + marketing, gross room revenue | Per the agreement |
| SpringHill Suites, TownePlace Suites | 5.0–5.5% + 2.0–2.5%[2] | Royalty + marketing, gross room revenue | Per the agreement |
The rules that change the books
What gross room sales includes
All revenue from renting guestrooms with no reduction for chargebacks, credit card service charges or uncollectible amounts, including no-show, early departure and reservation change fees, resort and destination fees, and cancellation or attrition fees[1].
Books in the Uniform System
The agreement requires gross room sales on an accrual basis and books kept under the Uniform System of Accounts for the Lodging Industry and GAAP, with an annual income statement in the Uniform System format within 90 days of year end, and audit costs shifting to the franchisee at an understatement of 5% or more[1].
Where Marriott books go wrong
Fees on the net rate
A merchant-model OTA remits the net rate. Report that and the brand fees are short on every night it sold — a gap the brand’s revenue audit is designed to find.
Card fees netted out of the basis
Gross room sales make no reduction for credit card service charges or chargebacks. A property that reports rooms revenue after its processing fees under-reports the basis every month.
Advance deposits booked as revenue
A deposit taken at booking is a liability until the guest stays. Booked as revenue, the month of the booking is overstated and the month of the stay is not.
Questions
Questions Marriott operators ask.
Do you reconcile OTA remittances?
Yes, from the statements the OTAs issue. Each remittance is matched to its deposit with the commission booked as its own expense, and the fee basis is whatever your license agreement defines, quoted beside the fee.
Do you handle occupancy tax?
It is accrued by property and jurisdiction from rooms revenue every month, so the return starts from a balance rather than a project. Filing it stays with you or your CPA.
Can we start with a few properties?
Yes. Two to five properties through one full month-end close, beside your current accountant, at the same price per property.
Sources
- [1]Fairfield by Marriott 2024 Franchise Disclosure Document (issued 31 March 2024), Item 6 and franchise agreement §13 — Marriott International · the franchisor’s or a filer’s own document
- [2]Chatham Lodging Trust annual report for 2025, note on franchise agreements (fees in force at 31 December 2025) — U.S. Securities and Exchange Commission · the franchisor’s or a filer’s own document
Start with a few properties.
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