Under what conditions are audit expenses due for a Caption By Hyatt franchise?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
ject to availability) during the inspection period. If we determine that the Hotel is not complying with the Hotel System, System Standards, or any other Franchise Agreement provisions, then you will pay or bear the cost of the Hotel's allocable share of all fees and other costs associated with the Quality Assurance and Compliance Program to correct the noncompliance. This includes (a) reimbursing our costs related to your non-compliance, such as travel and living expenses, guest satisfaction payments or expenses, and other costs for administering any necessary actions, follow-up inspections, audits or re-evaluation visits until you have fully corrected the non-compliance, (b) paying for meetings and additional brand standards training programs that we specify and require your personnel to attend relating to your non-compliance, and (c) paying program fees which we and/or our affiliates may use to promote guest satisfaction initiatives for Hyatt Network Hotels. These amounts will vary depending on the extent of your non-compliance and may increase if our costs increase. Currently, we impose the following fees for each 6-month FIP stage if the Hotel is placed in or remains in FIP protocols as a result of QA scores below requirements: (i) Stage 1 – $5,000 administrative fee; (ii) Stage 2 – $15,000 administrative fee; and (iii) Stage 3 – $20,000 administrative fee. In addition, if the Hotel does not achieve passing scores necessary to exit the FIP protocols by the end of Stage 3, the Hotel is placed in our BPP program, which requires the Hotel to pay an administrative fee of $45,000 per year. We may, as we deem appropriate, reduce or refund FIP fees based on improved performance and/or your accele
Source: Item 6 — Other Fees (FDD pages 20–36)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, franchisees may incur audit expenses if the hotel is found to be non-compliant with the Hotel System, System Standards, or any other provisions outlined in the Franchise Agreement. In such cases, the franchisee is responsible for covering the costs associated with the Quality Assurance and Compliance Program to rectify the noncompliance.
These costs may include reimbursing Caption By Hyatt for expenses related to the non-compliance, such as travel and living costs, guest satisfaction payments, and other administrative expenses linked to necessary actions, follow-up inspections, audits, or re-evaluation visits until the non-compliance is fully resolved. Additionally, franchisees may be required to pay for meetings and additional brand standards training programs mandated by Caption By Hyatt for their personnel, specifically addressing the areas of non-compliance. Franchisees may also have to cover program fees that Caption By Hyatt and its affiliates might use to promote guest satisfaction initiatives for Hyatt Network Hotels.
The specific amounts can vary based on the extent of the non-compliance and may increase if Caption By Hyatt's costs rise. As an example, the FDD states that for each 6-month FIP (Franchise Improvement Program) stage, if the Hotel is placed in or remains in FIP protocols as a result of QA scores below requirements, the fees are: Stage 1 - $5,000 administrative fee; Stage 2 - $15,000 administrative fee; and Stage 3 - $20,000 administrative fee. If the Hotel does not achieve passing scores necessary to exit the FIP protocols by the end of Stage 3, the Hotel is placed in the Brand Performance Program (BPP), which requires the Hotel to pay an administrative fee of $45,000 per year. However, Caption By Hyatt may reduce or refund FIP fees based on improved performance and/or accelerated compliance with hotel renovation requirements.