Is a Caption By Hyatt franchisee required to participate in all System Services?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are in full compliance with your obligations under the Franchise Agreement, one or more members of the Hyatt Group will provide you those System Services 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. "System Services" means those services that the Hyatt Group generally and periodically makes available on a central, regional, or other shared or group basis (whether in whole or in part) to those Brand Hotels and other Hyatt Network Hotels that the Hyatt Group reasonably determines will be provided those services. We categorize System Services as either Mandatory Services or Non-Mandatory Services. "Mandatory Services" means those mandatory System Services that one or more members of the Hyatt Group provides to the Hotel and certain other Brand Hotels and other Hyatt Network Hotels, and that the Hyatt Group reasonably determines must be acquired only from the Hyatt Group. "Non-Mandatory Services" means those non-mandatory System Services that one or more members of the Hyatt Group provides to the Hotel and certain other Brand Hotels and other Hyatt Network Hotels that the Hyatt Group
Source: Item 6 — Other Fees (FDD pages 20–36)
What This Means (2025 FDD)
According to the 2025 Caption By Hyatt Franchise Disclosure Document, franchisees must participate in all Mandatory Services and may choose to participate in Non-Mandatory Services. System Services are services that the Hyatt Group makes available to Brand Hotels and other Hyatt Network Hotels. These services are categorized as either Mandatory or Non-Mandatory. Mandatory Services are those that the Hyatt Group provides to the Hotel and other Brand Hotels, which the Hyatt Group determines must be acquired only from them. Non-Mandatory Services are optional services offered to the Hotel and other Brand Hotels.
Caption By Hyatt requires participation in certain system services, but also provides the flexibility to opt-in to additional services. This allows franchisees to tailor their service offerings to the specific needs and demands of their location and target market. However, franchisees must budget for and fully utilize the Mandatory Services, as these are deemed essential by the Hyatt Group for maintaining brand standards and operational efficiency.
The FDD specifies that the Hyatt Group may reclassify some Mandatory Services as Non-Mandatory and vice versa, depending on the hotel's circumstances, including its size, location, and market positioning. This flexibility suggests that Caption By Hyatt assesses each franchise location individually and adjusts service requirements accordingly. Franchisees should discuss with Caption By Hyatt which services are mandatory for their specific location and market to fully understand their obligations and potential costs.
System Services Costs include all costs that the Hyatt Group incurs in providing those System Services, including out-of-pocket expenses, costs for employees, occupancy costs, capital costs, administrative expenses, carrying costs and other costs. System Services Charges means the amounts that the Hyatt Group charges the Hotel 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.