Under what condition might the Royalty Fee be reduced for a Caption By Hyatt hotel?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
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 standard Royalty Fee is 5% of Gross Rooms Revenue. However, Caption By Hyatt may offer a reduced Royalty Fee under a specific circumstance.
For franchisees constructing a new Caption By Hyatt hotel, the franchisor may agree to reduce the Royalty Fee for the first one to three years of the hotel's operation. This potential reduction is intended to provide financial relief during the initial phase of the business when costs are typically higher and revenue may be lower.
This incentive can be a significant benefit for new franchisees as it lowers the initial financial burden. However, the FDD does not guarantee this reduction; it states that Caption By Hyatt 'may agree' to it, indicating that it is subject to negotiation and the franchisor's discretion. Prospective franchisees should discuss this possibility with Caption By Hyatt during their due diligence to understand the specific conditions and likelihood of receiving a reduced Royalty Fee.