When is the Royalty Fee accrued for a Caption By Hyatt hotel?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
-
- Royalty Fee. Your Royalty Fee will be 5% of Gross Rooms Revenue accrued during the previous month. If you are constructing a new Hotel, we may agree to reduce your Royalty Fee for the first 1-3 years of the Hotel's operations.
Source: Item 6 — Other Fees (FDD pages 20–36)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, the Royalty Fee is accrued based on the Gross Rooms Revenue during the previous month. Specifically, the Royalty Fee is 5% of the Gross Rooms Revenue. For new Caption By Hyatt hotels under construction, the Royalty Fee may be reduced for the first one to three years of operation, subject to agreement with the franchisor.
This means that as a Caption By Hyatt franchisee, you will owe a percentage of your hotel's monthly revenue as a royalty. This fee is calculated from the total revenue generated from room rentals before any deductions. The potential reduction in the initial years could provide some financial relief during the startup phase, allowing more capital to be reinvested into the business.
It is important for prospective franchisees to understand how 'Gross Rooms Revenue' is defined in the Franchise Agreement, as this definition will directly impact the amount of Royalty Fees owed. Additionally, franchisees should discuss the possibility of a reduced Royalty Fee during the initial years of operation for a newly constructed hotel, as this is subject to negotiation and agreement with Caption By Hyatt.