Is Caption By Hyatt required to have franchisees participate in a local or regional advertising cooperative?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
Except for the System Services, which we describe in Item 6, there are no advertising funds or local or regional advertising cooperatives to which franchisees or other Brand Hotel operators must contribute. However, promoting Brand Hotels as a single chain in the United States is an important part of the Hotel System, so you must participate in and use, in the manner we specify, all advertising, marketing and promotional activities, materials and programs that we periodically require for similarly-situated Brand Hotels (subject to Reasonable Deviations). (Section 5.2 of Franchise Agreement) The Hyatt Group prepares advertising, marketing and promotional programs as part of System Services. (Section 4.1 of Franchise Agreement) These programs may cover any media (including print, radio, television and electronic) and their scope may be local, regional, national or international or focus on a subset of hotels (like resort hotels or convention hotels). The Hyatt Group's corporate personnel and advertising agencies develop these programs. We will not use funds that franchisees pay for System Services principally to solicit new franchise sales. We will not prepare any periodic accounting of how we and our affiliates spend these funds. The Hyatt Group need not spend any amount on advertising, marketing or promotional programs in the area where the Hotel is located. There currently are no franchisee advertising councils that advise us on advertising and marketing policies. However, we may form, change, and dissolve these councils.
We may identify a region in which 2 or more Brand Hotels are located (including, if applicable, those that we or our affiliates own or operate) to establish a local or regional advertising cooperative (a "Cooperative"). We may form, change, dissolve and merge Cooperatives. The Cooperative's purpose will be to collect funds from its members and to plan, discuss, organize, develop, utilize, produce, disseminate, and implement marketing, advertising and promotional programs and materials on a collective basis (and to cover related expenses) for participating Brand Hotels. We will not require you to participate in a Cooperative. However, if you choose to participate in the Cooperative, you must do so according to the Cooperative's rules, including by paying your Hotel's allocable share for any advertising, marketing, promotional and other
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 48–65)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, franchisees are not required to participate in local or regional advertising cooperatives. The document states that there are no advertising funds or local or regional advertising cooperatives to which franchisees must contribute, apart from System Services fees detailed in Item 6. However, Caption By Hyatt may form local or regional advertising cooperatives, in which case participation is optional.
If a franchisee chooses to participate in a Cooperative, they must adhere to its rules, including paying their share of advertising, marketing, and promotional programs. The Cooperative manages its own administration and determines contribution amounts, typically requiring members to contribute at the same rate. These Cooperatives are expected to operate with written governing documents and provide financial statements for franchisee review.
All advertising, marketing, and promotional materials used by the Cooperative must comply with Caption By Hyatt's System Standards. Franchisees must also ensure that all advertising and use of proprietary marks are conducted in a dignified manner. Caption By Hyatt retains the right to require prior approval of materials and can direct franchisees to discontinue using any materials or programs with written notice.