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                                                                    Exhibit 10.3

                    GUARANTEE OF FRANCHISE LICENSE AGREEMENT

                HOMEWOOD SUITES BY HILTON - COLORADO SPRINGS, CO

THIS DOCUMENT AFFECTS AND WAIVES IMPORTANT RIGHTS OF THE PERSONS AND ENTITIES
SIGNING IT.

     THIS GUARANTEE OF FRANCHISE LICENSE AGREEMENT (the "Guarantee") is made by
APPLE HOSPITALITY FIVE, INC., a Virginia corporation, (the "Guarantor"), as of
the 26th day of February, 2003, in connection with that certain Franchise
License Agreement dated as of February 26, 2003, (the "License Agreement"), by
and between PROMUS HOTELS, INC. ("Licensor") and APPLE HOSPITALITY FIVE
MANAGEMENT, INC. ("Licensee") covering that certain Homewood Suites by Hilton -
Colorado Springs, Colorado hotel located at 9130 Explorer Drive, Colorado
Springs, Colorado 80920 (the "Hotel").

     WHEREAS, Guarantor is the owner of the Hotel (the "Property") and is the
sole owner of Licensee; and

     WHEREAS, Licensor would not have entered into the License Agreement absent
Guarantor's commitment to deliver this Guarantee; and

     WHEREAS, Guarantor acknowledges that it will receive considerable benefits
as a result of Licensee holding the license pursuant to the License Agreement.

     NOW, THEREFORE, for good and valuable consideration, including but not
limited to the execution of the License Agreement by Licensor, the undersigned
hereby unconditionally and irrevocably guarantees the following: (i) the full
and prompt payment of all sums owed under the License Agreement at the times and
according to the terms expressed therein, including, but not limited to, all
fees and charges, interest, default interest, and other costs and fees
(including, without limitation, attorneys' fees in connection with enforcement
of the License Agreement); and (ii) the performance of all other obligations of
Licensee arising under the License Agreement (Items (i) and (ii) are hereinafter
collectively referred to as the "Obligations").

     By signing this Guarantee, Guarantor also agrees that:

     1.   Guarantee of Payment and Performance. Guarantor's liability under this
Guarantee is a guarantee of payment and performance of the License Agreement and
not of collectibility. Guarantor's liability hereunder will continue until all
Obligations under the License Agreement have been satisfied in full and will not
be limited or affected in any way by transfer of the Hotel or any disability of
Licensee. Guarantor further agrees that should Licensee cease to exist or become
unable to perform its obligations under the License Agreement, Guarantor will be
deemed Licensee under the License Agreement and will perform all obligations of
Licensee existing or accruing thereunder.

     2.   Waivers of Certain Rights and Defenses. This Guarantee is absolute and
unconditional. Guarantor hereby waives the rights or benefits otherwise provided
to sureties or guarantors under any state or federal law, except as provided in
this Agreement. This waiver is expressly intended to waive any and all benefits
and defenses under California Civil Code ("CC") Sections 2819, 2845, 2849, and
2850 and any benefits or defenses available under the laws of any other state
that may be deemed to be applicable to this Guarantee, including, without
limitation, the right to require Licensor to (i) obtain Guarantor's consent to
any modification of the License Agreement or any other agreement between
Licensor and any party other than Guarantor, (ii) proceed against any collateral
that may be given for any of the Obligations, or (iii) pursue any other right or
remedy for Guarantor's benefit, and agrees that Licensor may proceed against
Guarantor for the Obligations guaranteed herein without taking any action
against Licensee or any other guarantor or pledgor. Guarantor agrees that
Licensor may unqualifiedly exercise, in its sole discretion, any or all rights
and remedies available to it against Licensee or any other guarantor or pledgor
without impairing Licensor's' rights and remedies in enforcing the

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Guarantee, under which Guarantor's liabilities will remain independent and
unconditional. Guarantor acknowledges that Licensor's exercise of certain of
such rights or remedies may affect, or eliminate Guarantor's right of
subrogation or recovery against Licensee and that Guarantor may incur a
partially or totally nonreimbursable liability under this Guarantee.

     3.   Additional Waivers. No failure or delay on Licensor's part in
exercising any power or privilege hereunder will impair any such power, right,
or privilege or be construed as a waiver of or an acquiescence therein.

     4.   Guarantee Made With Full Knowledge. Guarantor has had the opportunity
to review the matters discussed and contemplated by the License Agreement,
including the remedies Licensor may pursue against Licensee in the event of a
default under the License Agreement and Licensee's financial condition and
ability to perform under the License Agreement. Guarantor further agrees to keep
Licensor fully informed on all aspects of Licensee's financial condition and the
performance of Licensee's obligations to Licensor and that Licensor has no duty
to disclose to Guarantor any information pertaining to Licensee or to notify
Guarantor of Licensee's default under the License Agreement.

     5.   Guarantee Continues if Payments Are Avoided or Recovered from
Licensor. If all or any portion of the Obligations guaranteed hereunder are paid
or performed, Guarantor's obligations hereunder will continue and remain in full
force and effect if all or any part of such payment or performance is avoided or
recovered directly or indirectly from Licensor as a preference, fraudulent
transfer or otherwise, irrespective of any notice of revocation given by
Guarantor prior to such avoidance or recovery.

     6.   Financial Information. Upon Licensor's' request, Guarantor will
promptly deliver to Licensor complete and current financial statements and tax
returns and such other financial information about Guarantor as Licensor may
reasonably request.

     7.   Changes, Waivers, Revocations, and Amendments in Writing. No terms or
provisions of this Guarantee may be changed, waived, revoked, or amended without
Licensor's prior written consent. Should any provision of this Guarantee be
determined by a court of competent jurisdiction to be unenforceable, all of the
other provisions will remain effective. This Guarantee embodies the entire
agreement among the parties hereto with respect to the matters set forth herein
and supersedes all prior agreements among the parties with respect to the
matters set forth herein. No course of prior dealing among the parties, no usage
of trade, and no parol or extrinsic evidence of any nature will be used to
supplement, modify, or vary any of the terms hereof. There are no conditions to
the full effectiveness of this Guarantee. Notwithstanding the foregoing,
Licensor is willing to enter into its then-current standard form termination of
guarantee agreement in order to release the Guarantor from future obligations
under the Licensee Agreement upon the following conditions: (i) Licensor
receives evidence that Licensee owns fee simple title to the real property on
which the Hotel will be sited (i.e., a conformed copy of the deed submitted for
recording or like document bearing recording information) or that the Licensee
is a tenant under a long-term ground lease with an unrelated third party ground
lessor in an arms length transaction for a term equal to, or longer than, the
term of the License Agreement, (ii) Licensor receives a written request by
Guarantor to enter into our standard form termination of guarantee agreement,
and (iii) Licensee, at the time of Guarantor's request to terminate guarantee,
is in good standing under the License Agreement.

     8.   Other Guarantees. This Guarantee is in addition to the guarantees of
any other guarantors and any and all of Guarantor's other guarantees of
Licensee's liabilities to Licensor. This Guarantee will in no way limit or
lessen any other liability, howsoever arising, Guarantor may have for the
payment of any other obligation of Licensee to Licensor.

     9.   Representations and Warranties. The following representations and
warranties will be continuing representations and warranties so long as any
Obligation will remain unpaid or unperformed:

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          (a)       Guarantor has the requisite power to execute, deliver, and
perform the terms and provisions of the Guarantee and has taken all necessary
corporate actions to authorize the execution, delivery and performance by it of
the Guarantee. This Guarantee is a valid, binding, and legally enforceable
obligation of Guarantor in accordance with its terms.

          (b)       The execution and delivery of this Guarantee are not, and
the performance of this Guarantee will not be, in contravention of, or in
conflict with, any agreement, indenture, or undertaking to which Guarantor is a
party or by which it or any of its property is or may be bound or affected.

          (c)       Guarantor owns all rights, title, and interest in and to the
Hotel.

          (d)       Guarantor owns all or a controlling interest in Licensee.

     10.  Additional Provisions.

          (a)       If there is more than one Guarantor named herein, any
reference to Guarantor will mean any one and all of them and the singular will
include the plural. All obligations of each such Guarantor to Licensor of
whatever nature are hereby jointly and severally guaranteed by each Guarantor.

          (b)       Each Guarantor hereby jointly and severally holds harmless,
and agrees to defend, protect, and indemnify Licensor from any actions, causes
of action, liabilities, damages, losses, and fees (including attorneys' fees)
and all other claims of every nature which may arise as a result of any dispute
between or among any of Guarantor and any other persons or entities.

          (c)       Licensor may assign this Guarantee without in any way
affecting Guarantor's liability. Licensor will endeavor to give Guarantor notice
of such assignment, but the failure to do so will not affect Guarantor's
liability. This Guarantee will inure to the benefit of Licensor and its
successors and assigns and will bind Guarantor and Guarantor's heirs, executors,
administrators, successors, and assigns.

          (d)       Any notices, requests and demands to be made hereunder will
be in writing and will be effective on the earlier of (i) the day it is sent by
facsimile with a confirmation of receipt; or (ii) the day it is delivered by
express delivery service; or (iii) the third business day after it is sent by
first class or certified mail, to the appropriate party at the address, or to
the fax number, set forth below, or such other address or fax number of which
the notifying party has been notified:

     If to Licensor:     Promus Hotels, Inc.
                         9336 Civic Center Drive
                         Beverly Hills, CA 90210
                         Attention: General Counsel
                         Phone: (310) 278-4321
                         Fax:   (310) 278-9218

     If to Guarantor:    Apple Hospitality Five, Inc.
                         Attn:  Mr. Samuel F. Reynolds
                         10 S. Third Street
                         Richmond, VA 23219
                         Phone: (804) 344-8121
                         Fax:   (804) 344-8129

          (e)       If Guarantor is a partnership, limited liability company, or
other unincorporated association, its liability will not be affected by changes
in the name of the entity or in its membership.

          (f)       This Guarantee is executed in accordance with, and pursuant
to, the terms of the License Agreement and any default hereunder will be a
default under the License Agreement.

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     11.  Controlling Law. This Guarantee will become valid when signed by both
parties. Both parties hereby agree that the State of New York has a deep and
well developed history of business decisional law. For this reason, both parties
agree that except to the extent governed by the United States Trademark Act of
1946 (Lanham Act; 15 U.S.C. Para 1050 et seq.), as amended, this Guarantee, all
relations between Licensor, Guarantor and Licensee, and any and all disputes
between Licensor, Guarantor and Licensee, whether sounding in contract, tort, or
otherwise, are to be exclusively construed in accordance with and/or governed by
(as applicable) the laws of the State of New York without recourse to New York
(or any other) choice of law or conflicts of law principles. If, however, any
provision of this Guarantee would not be enforceable under the laws of New York,
and if the Hotel is located outside of New York and the provision would be
enforceable under the laws of the state in which the Hotel is located, then the
provision in question (and only that provision) will be interpreted and
construed under the laws of that state. Nothing in this section is intended to
invoke the application of any franchise, business opportunity, antitrust,
"implied covenant," unfair competition, fiduciary or any other doctrine of law
of the State of New York or any other state which would not otherwise apply
absent this paragraph.

     Because, as stated above, the State of New York has a well developed
history of business decisional law and because the courts of the State of New
York are best suited to interpret and apply that law, each party hereby agrees
that any litigation arising out of or related to this Guarantee, any breach of
this Guarantee, the relationship between Licensor, Guarantor and Licensee, and,
any and all disputes between Licensor, Guarantor and Licensee, whether sounding
in contract, tort, or otherwise, will be submitted to and resolved exclusively
by a court of competent jurisdiction located in the City and State of New York.
Guarantor hereby waives, and agrees never to assert, move or otherwise claim
that this venue is for any reason improper, inconvenient, prejudicial or
otherwise inappropriate (including, any claim under the judicial doctrine of
forum non conveniens).

     If the parties' mutual choice of venue in the City and State of New York is
not honored by the subject court(s), then the parties hereby agree that any
litigation arising out of or related to this Guarantee; any breach of this
Guarantee; the relationship between Licensor, Guarantor and Licensee; and, any
and all disputes between Licensor, Guarantor and Licensee, whether sounding in
contract, tort, or otherwise, will instead be submitted to and resolved
exclusively by a court of competent jurisdiction located in the City and County
of Los Angeles, California. Guarantor hereby waives, and agrees never to assert,
move or otherwise claim that this substitute venue is for any reason improper,
inconvenient, prejudicial or otherwise inappropriate (including, any claim under
the judicial doctrine of forum non conveniens).

     12.  WAIVER OF JURY TRIAL. GUARANTOR HEREBY WAIVES ITS RIGHT TO A TRIAL BY
JURY WITH RESPECT TO THE ENFORCEMENT OF THIS GUARANTEE. THIS WAIVER WILL APPLY
TO ALL CAUSES OF ACTION THAT ARE OR MIGHT BE INCLUDED IN SUCH ACTION, INCLUDING
BUT NOT LIMITED TO CLAIMS RELATING TO THE ENFORCEMENT OR INTERPRETATION OF THIS
GUARANTEE, ALLEGATIONS OF STATE OR FEDERAL STATUTORY VIOLATIONS, FRAUD,
MISREPRESENTATION, OR SIMILAR CAUSES OF ACTION, AND A CONNECTION WITH ANY LEGAL
ACTION INITIATED FOR THE RECOVERY OF DAMAGES ARISING UNDER THIS GUARANTEE.

     THE UNDERSIGNED GUARANTOR ACKNOWLEDGES THAT IT WAS AFFORDED THE OPPORTUNITY
TO READ THIS DOCUMENT CAREFULLY AND TO REVIEW IT WITH AN ATTORNEY OF ITS CHOICE
BEFORE SIGNING IT. GUARANTOR ACKNOWLEDGES HAVING READ AND UNDERSTOOD THE MEANING
AND EFFECT OF THIS DOCUMENT BEFORE SIGNING IT.

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IN WITNESS WHEREOF, the parties have executed this Agreement which has an
effective date as of the date first written above.


GUARANTOR:                                    LICENSOR:

APPLE HOSPITALITY FIVE, INC.,                 PROMUS HOTELS, INC.,
a Virginia corporation                        a Delaware corporation


By:   /s/ Glade M. Knight                     By: /s/ Dawn P. Beghi
   -------------------------------------         -------------------------------

Name:  Glade M. Knight                        Name: Dawn P. Beghi
     -----------------------------------           -----------------------------

Title:  President                             Title: VP-Franchise Administration
        --------------------------------            ----------------------------

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