What do gross fees for Caption By Hyatt include?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
- Gross fees—Gross fees include base management fees, incentive management fees, and franchise and other fees.
Base management fees are generally calculated as a percentage of gross revenues, and incentive management fees are generally computed based on a hotel profitability measure.
Included in the management fees are fees that we earn in exchange for providing the hotel access to Hyatt's intellectual property ("IP").
Franchise and other fees consist of (i) an initial franchise fee and ongoing royalty fees computed as a percentage of gross room revenues and as applicable, food and beverage revenues, (ii) termination fees, (iii) license fees associated with the licensing of the Hyatt brand names through our co-branded credit card programs and with sales of our branded residential units, (iv) management and royalty fees related to the management and licensing of certain of our brands to the Unlimited Vacation Club following the UVC Transaction, and (v) fees from hotel services provided to certain all-inclusive resorts.
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, gross fees encompass several revenue streams for the company. These include base management fees, incentive management fees, and franchise and other fees. Base management fees are typically calculated as a percentage of the gross revenues generated by the hotel. Incentive management fees, on the other hand, are generally computed based on a hotel's profitability.
The franchise and other fees component consists of multiple elements. It includes the initial franchise fee and ongoing royalty fees, which are calculated as a percentage of gross room revenues and, where applicable, food and beverage revenues. Additionally, this category covers termination fees that may be incurred under certain circumstances. It also includes license fees associated with the licensing of the Hyatt brand names through co-branded credit card programs and sales of branded residential units.
Furthermore, franchise and other fees include management and royalty fees related to the management and licensing of certain of their brands to the Unlimited Vacation Club. Finally, this category includes fees from hotel services provided to certain all-inclusive resorts. Understanding the composition of gross fees is crucial for prospective Caption By Hyatt franchisees as it provides insight into the various ways the franchisor generates revenue from its operations and how these fees might impact the franchisee's financial obligations and revenue sharing.