For how long might the Royalty Fee be reduced for a new Caption By Hyatt hotel?

According to Caption By Hyatt's 2025 Franchise Disclosure Document, if a franchisee is constructing a new hotel, Caption By Hyatt may agree to reduce the Royalty Fee for the first one to three years of the hotel's operations. The standard Royalty Fee is 5% of Gross Rooms Revenue accrued during the previous month.

This reduction in Royalty Fees can be a significant benefit for new Caption By Hyatt franchisees as it lowers the initial financial burden during the startup phase. New hotels typically require time to establish themselves in the market and reach optimal occupancy rates. The reduced Royalty Fee allows franchisees to allocate more capital towards other essential aspects of the business, such as marketing, staff training, and property maintenance.

However, the FDD states that the reduction is not guaranteed; it is subject to Caption By Hyatt's agreement. A prospective franchisee should discuss the possibility of a Royalty Fee reduction with Caption By Hyatt during the franchise application process and negotiate the terms in writing. Understanding the specific conditions and duration of any potential reduction is crucial for accurate financial planning and forecasting.