When does the Guarantor Monetary Threshold increase each year for a Caption By Hyatt franchise?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
The Guarantor Monetary Threshold will increase automatically each year of the Franchise Agreement's term, without notice from us, effective on the first day of the
calendar month during which the Franchise Agreement's effective date falls, by an amount equal to the CPI Increase. The "CPI Increase" means the amount to be adjusted multiplied by a fraction, the numerator of which is the Consumer Price Index for All Urban Consumers for All Items, which the U.S. Department of Labor, Bureau of Labor Statistics publishes (the "Base Index") as of the first day of the calendar month during which the increase is to take effect, and the denominator of which is the Base Index in effect on the Franchise Agreement's effective date or used for the most recent increase (whichever is later). If the Base Index is no longer published, we may designate another reasonably comparable index for calculating changes in the cost of living or purchasing power for consumers. Your guarantors must provide us on an annual basis financial statements or other documents that we reasonably specify, which you or the guarantor certify in the manner we specify, demonstrating that at least one guarantor satisfies the Guarantor Monetary Threshold. You and your guarantors must reasonably cooperate with all auditing and reporting requirements relating to the Guarantor Monetary Threshold.
Source: Item 15 — Obligation to Participate in the Actual Operation of the Franchise Business (FDD pages 71–74)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, the Guarantor Monetary Threshold will increase automatically each year of the Franchise Agreement's term. This increase takes effect on the first day of the calendar month during which the Franchise Agreement's effective date falls. The increase is based on the CPI Increase, which is calculated using the Consumer Price Index for All Urban Consumers for All Items published by the U.S. Department of Labor, Bureau of Labor Statistics.
In practical terms, this means that the financial requirements for the guarantor of a Caption By Hyatt franchise will adjust annually to account for inflation. The adjustment is tied to the Consumer Price Index (CPI), a common measure of inflation, ensuring that the real value of the guaranteed amount is maintained over time. This protects Caption By Hyatt from inflation-related losses.
For a prospective franchisee, this implies that the guarantor must maintain a net worth and liquid assets that meet the increasing threshold each year. Franchisees should factor in this annual increase when assessing their financial capacity and the financial capacity of their guarantors. Additionally, franchisees must provide Caption By Hyatt with annual financial statements or other documents to demonstrate that the guarantor meets the adjusted Guarantor Monetary Threshold.
It is important to note that if the Base Index is no longer published, Caption By Hyatt may designate another reasonably comparable index for calculating changes in the cost of living or purchasing power for consumers. Franchisees and their guarantors must cooperate with all auditing and reporting requirements related to the Guarantor Monetary Threshold.