Does Caption By Hyatt charge System Services Charges for Non-Mandatory Services?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
"System Services Costs" means, for the System Services in which the Hotel participates (or is required to participate), all costs that the Hyatt Group actually incurs or properly accrues during the period of determination in providing those System Services, including out-of-pocket expenses, costs for employees, occupancy costs, capital costs, administrative expenses, carrying costs and other costs. Any allocation of shared costs that the Hyatt Group makes in good faith and with the intention of fairly allocating those costs to System Services is binding on us and you. The Hyatt Group may vary these allocations depending on, among other things, the specific brand, size or market positioning of the Hotel. System Services Costs include the actual costs that the Hyatt Group incurs and are not subject to any mark-up, premium or profit on any Mandatory Services, but may include a profit or mark-up component on Non-Mandatory Services.
"System Services Charges" means the amounts that the Hyatt Group charges the Hotel, and you will pay, for the Hotel's equitably allocable share of the System Services Costs attributable to the System Services in which the Hotel participates (or is obligated to participate), as the Hyatt Group periodically determines them. The Hyatt Group determines System Services Charges on the same basis as it determines those amounts for other Brand Hotels and Hyatt Network Hotels that we periodically and reasonably determine are similarly situated with the Hotel (subject to Reasonable Deviations (as defined in Item 8) and that participate in those System Services in the same manner (collectively, "Participating Hotels").
Source: Item 6 — Other Fees (FDD pages 20–36)
What This Means (2025 FDD)
According to the 2025 Caption By Hyatt Franchise Disclosure Document, the Hyatt Group may include a profit or mark-up component on Non-Mandatory Services when determining System Services Charges. System Services are services that the Hyatt Group makes available to Brand Hotels and other Hyatt Network Hotels on a central, regional, or other shared or group basis. These services are categorized as either Mandatory or Non-Mandatory.
The System Services Charges are the amounts that the Hyatt Group charges the Hotel for its share of the System Services Costs attributable to the services in which the Hotel participates. These charges are determined on the same basis as for other similarly situated Brand Hotels and Hyatt Network Hotels.
For a Caption By Hyatt franchisee, this means that while participation in Non-Mandatory Services is optional, the cost of these services may include a profit margin for the Hyatt Group. This is in contrast to Mandatory Services, where the charges reflect actual costs without any markup. Franchisees should carefully evaluate the potential benefits and costs of participating in Non-Mandatory Services, considering that these services may come with an additional profit component for the franchisor.