How are ongoing royalty fees computed for a Caption By Hyatt franchise?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchise and other fees consist of (i) an initial franchise fee and ongoing royalty fees computed as a percentage of gross room revenues and as applicable, food and beverage revenues, (ii) termination fees, (iii) license fees associated with the licensing of the Hyatt brand names through our co-branded credit card programs and with sales of our branded residential units, (iv) management and royalty fees related to the management and licensing of certain of our brands to the Unlimited Vacation Club following the UVC Transaction, and (v) fees from hotel services provided to certain all-inclusive resorts.
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to the 2025 FDD, Caption By Hyatt's ongoing royalty fees are calculated as a percentage of gross room revenues and, if applicable, food and beverage revenues. This means that a franchisee will pay a portion of their earnings from room rentals and food and beverage sales to Caption By Hyatt on a regular basis.
The royalty fees provide Caption By Hyatt with a continuous income stream from each franchised location, aligning the franchisor's success with the franchisee's revenue generation. For franchisees, this means that their royalty obligations will fluctuate based on their sales performance. A period of higher revenues will result in higher royalty payments, while a period of lower revenues will decrease the royalty burden.
It's important for prospective Caption By Hyatt franchisees to carefully consider these ongoing royalty fees when evaluating the financial viability of the franchise. Understanding how these fees are calculated and their potential impact on profitability is crucial for making an informed investment decision. Franchisees should also inquire about any potential changes to the royalty fee structure in the future, as these could affect their long-term financial planning.