When do Caption By Hyatt's performance guarantees expire?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
iness, we enter into various commitments, guarantees, surety and other bonds, and letter of credit agreements.
Commitments—At December 31, 2024, we are committed, under certain conditions, to lend, provide certain consideration to, or invest in various business ventures up to $659 million, net of any related letters of credit.
Performance Guarantees—Certain of our contractual agreements with third-party owners require us to guarantee payments to the owners if specified levels of operating profit are not achieved by their hotels. Except as described below, at December 31, 2024, our performance guarantees had $150 million of remaining maximum exposure and expire between 2025 and 2042.
Through acquisitions, we acquired certain m
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 company has performance guarantees in place with third-party owners. These guarantees are designed to ensure that owners receive payments if their hotels do not reach specified levels of operating profit. As of December 31, 2024, Caption By Hyatt's remaining maximum exposure for these performance guarantees was $150 million, and these guarantees are set to expire between 2025 and 2042.
Additionally, Caption By Hyatt acquired certain management and hotel services agreements through acquisitions that include performance guarantees based on annual performance levels. These particular guarantees have expiration dates ranging from 2027 to 2045. However, the terms of these agreements limit Caption By Hyatt's exposure, making it difficult to reasonably estimate the maximum potential future payments.
It's important for prospective Caption By Hyatt franchisees to understand the nature and extent of these performance guarantees, as they reflect the company's financial commitments and potential liabilities. While these guarantees do not directly impact franchisees, they provide insight into Caption By Hyatt's financial health and its relationships with hotel owners. Franchisees should inquire about the specific terms and conditions of these guarantees to fully assess any potential implications.