Under what circumstances is Caption By Hyatt the employer of hotel employees?

According to Caption By Hyatt's 2025 Franchise Disclosure Document, Caption By Hyatt may be the employer of hotel employees under specific management agreements, primarily within the U.S. In these instances, Caption By Hyatt is reimbursed for the costs associated with managing these employees, without adding a margin. These reimbursements are then recognized as revenues for reimbursed costs on the consolidated statements of income as services are rendered.

This arrangement means that while Caption By Hyatt manages the employees, the financial responsibility for their compensation and related costs is passed on to the hotel owner. This could simplify the franchisee's operational responsibilities by allowing Caption By Hyatt to handle employee management directly. However, it's important to note that this arrangement is not standard across all management agreements and is more common within the U.S.

For a prospective Caption By Hyatt franchisee, understanding the specific terms of the management agreement is crucial. It is important to clarify whether Caption By Hyatt will be the employer of the hotel employees, what costs will be reimbursed, and how these reimbursements are accounted for. Additionally, franchisees should inquire about the potential impact of this arrangement on their overall financial performance and operational control.