How are costs incurred related to employee management services reimbursed to Caption By Hyatt?

According to Caption By Hyatt's 2025 Franchise Disclosure Document, under certain management agreements, primarily within the U.S., Caption By Hyatt may act as the employer of hotel employees. In these instances, the costs incurred by Caption By Hyatt related to employee management services are reimbursed with no added margin. These reimbursements are recognized over time as services are rendered and are recorded as revenues for reimbursed costs on Caption By Hyatt's consolidated statements of income.

This arrangement means that if Caption By Hyatt is the employer of the hotel staff, franchisees will reimburse Caption By Hyatt for the actual costs of employee management without any additional markup or profit for Caption By Hyatt. This pass-through of costs is reflected in Caption By Hyatt's financial statements as both revenues and expenses, ensuring transparency in the handling of these funds.

For a prospective Caption By Hyatt franchisee, this is a notable benefit as it ensures that they are only paying the direct costs associated with employee management when Caption By Hyatt acts as the employer. This arrangement can help in budgeting and financial planning, as the franchisee can expect to reimburse the actual expenses without any hidden fees or markups from Caption By Hyatt. It's important for franchisees to understand the specific conditions under which Caption By Hyatt acts as the employer, as this arrangement is primarily within the U.S.