What do System Services Charges include for a Caption By Hyatt franchise?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
"System Services Charges" means the amounts that the Hyatt Group charges the Hotel, and Franchisee hereby agrees to pay, for the Hotel's equitably allocable share of the System Services Costs attributable to the System Services in which the Hotel participates (or is obligated to participate), as periodically determined by the Hyatt Group.
"System Services Costs" means, with respect to any of the System Services in which the Hotel participates (or is required to participate), all costs actually incurred or properly accrued by any member of Hyatt Group during the period of determination in respect of the provision of such System Services, including out-of-pocket expenses, costs for employees, occupancy costs, capital costs, administrative expenses, carrying costs and other costs incurred directly or indirectly in providing System Services.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, System Services Charges are the amounts that the Hyatt Group charges the Hotel for its equitably allocable share of the System Services Costs attributable to the System Services in which the Hotel participates or is obligated to participate. These charges are periodically determined by the Hyatt Group. Franchisees are obligated to pay these charges.
System Services Costs encompass all costs actually incurred or properly accrued by any member of Hyatt Group during the determination period. These costs relate to providing System Services and include out-of-pocket expenses, employee costs, occupancy costs, capital costs, administrative expenses, carrying costs, and other costs incurred directly or indirectly in providing System Services.
Caption By Hyatt franchisees should understand that these System Services Charges can fluctuate as Hyatt Group periodically changes its method of allocation of the System Services Costs among Participating Hotels. However, the method of allocation and categories of Participating Hotels must be determined on a reasonable, equitable, and nondiscriminatory basis. Franchisees are required to pay these System Services Charges monthly, along with Royalty Fees, to Hyatt.