What is indicative of the value the partner derives from the use of the Hyatt name for Caption By Hyatt?
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 Caption By Hyatt's 2025 Franchise Disclosure Document, the revenues and operating profits earned by hotels are indicative of the value that third-party owners and franchisees derive from having access to Hyatt's intellectual property. Additionally, cardholder spending for the license to the Hyatt name through co-branded credit card programs indicates the value the partner receives from using the Hyatt name.
This means that Caption By Hyatt assesses the financial performance of hotels operating under its brand, along with the spending activity of cardholders in co-branded credit card programs, to gauge how much value these partners are getting from the association with the Hyatt brand. The more revenue and profit a hotel generates, and the more cardholders spend, the more value Caption By Hyatt assumes its partners are receiving from the brand affiliation.
For a prospective Caption By Hyatt franchisee, this highlights the importance of brand recognition and the potential financial benefits of aligning with a well-known brand like Hyatt. It suggests that the franchisor actively monitors and values the brand's impact on franchisees' financial performance. Franchisees should consider these factors when evaluating the overall value proposition of a Caption By Hyatt franchise.