Is the IT Project Management Services Fee for a Caption By Hyatt franchise refundable?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Franchisee shall pay Hyatt the "IT Project Management Services Fee" set forth in Exhibit B-1, plus any applicable taxes thereon.
The IT Project Management Services Fee is non-refundable.
Franchisee shall reimburse Hyatt's or its Affiliate's reasonable expenses in connection with rendering the IT Project Management Services, including any necessary transportation, lodging and meals, plus applicable taxes thereon.
The IT Project Management Services Fee (including expenses) will be invoiced by Hyatt no earlier than: (i) Hyatt's completion of the IT Project Management Services or (ii) upon Franchisee's termination of the Hotel development project or the IT Project Management Services, for any reason, in either event regardless of whether Hyatt has approved the Hotel for opening.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, the IT Project Management Services Fee for a Caption By Hyatt franchise is generally non-refundable. Specifically, the FDD states that the franchisee shall pay Hyatt the IT Project Management Services Fee as outlined in Exhibit B-1, along with any applicable taxes, and that this fee is non-refundable. This means that once paid, the franchisee cannot get this money back, regardless of whether the hotel opens or the project is terminated.
However, there is a limited warranty associated with the IT Project Management Services. If the services do not meet the specifications outlined in Exhibit E, the franchisee must notify Hyatt in writing within 30 days of completion. In such cases, Hyatt has the option to repair the defect, re-perform the services, or refund the sums paid for the defective services. This warranty provides a potential avenue for a refund, but it is specifically tied to the quality and adherence to specifications of the IT project management services, not a general cancellation or dissatisfaction with the project.
This arrangement is fairly standard in the franchise industry, where initial fees are often non-refundable to cover the franchisor's upfront costs and efforts. However, the inclusion of a limited warranty and potential remedies for defective services offers some protection to the Caption By Hyatt franchisee. It is important for prospective franchisees to carefully review Exhibit B-1 for the exact fee amount and Exhibit E for the specifications of the IT Project Management Services to fully understand their obligations and rights.