How often does the Guarantor Monetary Threshold increase 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 increases 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.
For a prospective Caption By Hyatt franchisee, this means that the financial requirements for the guarantor will rise annually, potentially requiring the guarantor to provide additional financial resources to maintain compliance with the Franchise Agreement. The CPI Increase is determined by multiplying an amount to be adjusted by a fraction. The numerator of this fraction is the Base Index as of the first day of the calendar month during which the increase is to take effect, and the denominator is the Base Index in effect on the Franchise Agreement's effective date or used for the most recent increase, whichever is later.
Caption By Hyatt may designate another reasonably comparable index if the Base Index is no longer published, which provides flexibility in adjusting the threshold based on changes in the cost of living or purchasing power. Franchisees must ensure their guarantors provide annual financial statements or other specified documents to demonstrate they meet the Guarantor Monetary Threshold. This ongoing requirement ensures that the guarantor's financial capacity keeps pace with inflation and other economic factors, safeguarding Caption By Hyatt's interests under the Franchise Agreement.