Does Hyatt charge a successor franchise fee for a Caption By Hyatt franchise?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee satisfies all of the other conditions for a successor franchise agreement under this ARTICLE XIII, Franchisee agrees to sign the form of franchise agreement and any ancillary agreements Hyatt then customarily uses in granting franchises for Brand Hotels (modified as necessary to reflect the fact that it is for a successor franchise and that there will be no further renewal or successor franchise rights), which may contain provisions that differ materially from any and all of those contained in this Agreement, except that Hyatt will not charge a successor franchise fee.
Franchisee and the Guarantors further agree to sign general releases, in a form satisfactory to Hyatt, of any and all claims against Hyatt and its Affiliates and its and their respective owners, officers, directors, managers, employees, agents, representatives, successors, and assigns.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to the 2025 Caption By Hyatt Franchise Disclosure Document, Hyatt will not charge a successor franchise fee if a franchisee meets all other conditions for a successor franchise agreement.
However, to obtain a successor franchise agreement, the franchisee must meet several conditions. These include substantial compliance with the existing agreement, meeting Hyatt's standards for franchisees, receiving passing Quality Assurance Scores, and having the right to maintain possession of the hotel for at least ten years following the agreement's expiration. The franchisee must also provide written notice to Hyatt of their intent to exercise the Successor Franchise Right between 18 and 21 months before the agreement expires and pay Hyatt's then-current PIP (Property Improvement Plan) fee, which is non-refundable.
If the franchisee meets these conditions, they must sign Hyatt's standard franchise agreement and any related documents, which may differ significantly from the original agreement, although Hyatt will not charge a successor franchise fee. Additionally, the franchisee and any guarantors must sign general releases of any claims against Hyatt and its affiliates.
In summary, while Caption By Hyatt does not charge a successor franchise fee, franchisees must meet specific requirements and potentially agree to new terms and conditions to obtain a successor franchise agreement.