factual

What aspects of the Hotel operation does Caption By Hyatt's System Standards regulate?

Caption_By_Hyatt Franchise · 2025 FDD

Answer from 2025 FDD Document

Item 8**

RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES

You must operate the Hotel according to our System Standards, which may regulate, among other things, the types, models, and brands of products and services your Hotel uses; required and authorized products and services that the Hotel must offer to customers and quality standards for those products and services (including F&B Operations, as defined below); and designated and approved suppliers of these products and services, which may include or be limited to us and/or our affiliates that we may designate. "F&B Operations" means all food and beverage operations for Hotel guests and patrons consisting of the following (in each case, to the extent applicable): (a) restaurant, dining, bar, lounge, and retail food and beverage services; (b) banquet, meeting, event, catering (including outside catering), and room services; (c) a multi-functional service area that serves coffee and breakfast, lunch and dinner menu items, and alcoholic beverages; (d) grab-and-go food and beverage items available for purchase in a Hotel market; (e) a communal area serving as a combination restaurant, bar, coffee shop and workplace; (f) a standalone restaurant and/or rooftop bar; and (g) all other food, beverage and related services at the Hotel.

If you are constructing a new Brand Hotel or converting an existing hotel or other building to a Brand Hotel, we or Hyatt Corporation will advise you on the System Standards to be met, the

aesthetics to be reflected, and the systems to be installed at the Hotel, so the Hotel can be opened and operated as a Brand Hotel. We and Hyatt Corporation are the only approved suppliers for these services if you are constructing a new Hotel. We also provide IT Project Management Services and other technology-related services as well as PMS hosting services.

You must use the Opera PMS at the Hotel. You must sign the Hosting Services Agreement (Exhibit K) (the "Hosting Services Agreement") and engage us to host the PMS remotely. We will provide services necessary to install access to the PMS at the Hotel under the Franchise Agreement. You must also sign an agreement with our designated supplier to provide connectivity services and training for the PMS. If your Hotel is in Hawaii or Puerto Rico, under certain circumstances (with our approval), we may permit you to self-host the PMS at the Hotel.

System Services

Mandatory Services and Non Mandatory Services comprise the System Services. If you are in full compliance with your obligations under the Franchise Agreement, we or one or more members of the Hyatt Group will provide you those System Services that we periodically specify. You must participate in all Mandatory Services and related programs and may (at your option) participate in any or all Non-Mandatory Services and related programs, in the manner that we periodically specify. You must acquire all Mandatory Services (as we periodically modify them) only from a member of the Hyatt Group. We may periodically add to, delete from, and otherwise modify these System Services, and the scope of and manner of providing System Services, upon notice to you. Also, due to the differences in products, services, markets and hospitality experiences among Brand Hotels and other Hyatt Network Hotels, we may, where we deem appropriate in our judgment: (a) classify certain System Services as Mandatory Services for the Hotel which we classify as Non-Mandatory Services or do not offer to other Brand Hotels and/or other Hyatt Network Hotels;

Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 40–45)

What This Means (2025 FDD)

According to the 2025 Caption By Hyatt Franchise Disclosure Document, franchisees must operate their hotels according to the System Standards set by Caption By Hyatt. These standards dictate various aspects of the hotel's operation, including the types, models, and brands of products and services used. The System Standards also cover the required and authorized products and services that the hotel must offer to customers, as well as the quality standards for those products and services, including food and beverage operations. Caption By Hyatt also designates and approves suppliers for these products and services, which may include Caption By Hyatt and its affiliates.

The System Standards also extend to the construction and remodeling of the hotel. If a franchisee is constructing a new Caption By Hyatt hotel or converting an existing building, Caption By Hyatt or Hyatt Corporation will advise on the System Standards to be met, the aesthetics to be reflected, and the systems to be installed. Caption By Hyatt and Hyatt Corporation are the only approved suppliers for these services when constructing a new hotel.

Furthermore, franchisees must adhere to Caption By Hyatt's designated third-party provider for travel agent commission program services and quality assurance and inspection services. While franchisees can source most other products and services according to the System Standards, these standards impose minimum requirements for delivery, performance, reputation, prices, quality, design, and appearance. Franchisees must also ensure strict compliance with all applicable laws and maintain adequate insurance policy coverage in the amounts specified by Caption By Hyatt. The franchise agreement states that approximately 95% of the franchisee's total purchases and leases to establish and operate the hotel must be made from designated or approved suppliers, or according to Caption By Hyatt's System Standards.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.