What factors will Caption By Hyatt continue to evaluate during the measurement period?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
For each performance obligation satisfied over time, we recognize revenues using an output method based on the value transferred to the customer. Revenues are recognized based on the transaction price and the observable outputs related to each performance obligation. We deem the following to represent our progress in satisfying these performance obligations:
- revenues and operating profits earned by the hotels during the reporting period for access to Hyatt's IP as it is indicative of the value third-party owners and franchisees derive;
- revenues and operating profits of the hotels for the promise to provide services to the hotels under management and hotel services agreements;
- award night redemptions or point redemptions with third-party partners for the administration of the loyalty program performance obligation; and
- cardholder spend for the license to the Hyatt name through our co-branded credit card programs as it is indicative of the value our partner derives from the use of our name.
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, Caption By Hyatt recognizes revenues based on transaction prices and observable outputs related to performance obligations. The brand deems several factors to represent progress in satisfying these obligations. These include revenues and operating profits earned by the hotels for access to Hyatt's intellectual property, as it indicates the value third-party owners and franchisees derive.
Additionally, Caption By Hyatt will evaluate revenues and operating profits of the hotels for the promise to provide services under management and hotel services agreements. The brand will also consider award night redemptions or point redemptions with third-party partners for the administration of the loyalty program performance obligation. Finally, cardholder spend for the license to the Hyatt name through co-branded credit card programs will be evaluated, as it indicates the value the partner derives from the use of the name.
For a prospective Caption By Hyatt franchisee, this means that the financial performance of their hotel, particularly in terms of revenue and operating profit, will be a key indicator of their success and the value they are receiving from the franchise. The franchisee's ability to leverage Hyatt's intellectual property, participate in loyalty programs, and potentially engage in co-branded credit card programs will all contribute to the overall assessment of their performance and the recognition of revenue by Hyatt.