Under what conditions will Caption By Hyatt refund the application fee, and what amount will be deducted?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
5**
INITIAL FEES
Application Fee
You will pay us a lump-sum application fee when you submit the franchise application through our online application portal. If the Hotel is new to the Brand Hotel network, the lumpsum new development application fee is $95,000 plus an additional $500 for each guest room in the Hotel over 200 rooms. If you are purchasing an existing Brand Hotel, you or the transferor will pay us a lump-sum change of ownership application fee of $150,000 when you submit the franchise application through our online application portal. If you withdraw your franchise application before we approve it, or if we do not approve your franchise application for any reason, then we will refund your application fee, less a $7,500 fee to cover our costs for evaluating your application. After we approve your franchise application, the application fee is non-refundable, even if we and you do not sign a Franchise Agreement. If you and we agree to add any guest rooms to the Hotel before the Hotel opens, then you must pay us, when we approve the additional guest rooms, an additional non-refundable application fee of $500 multiplied by the number of additional guest rooms
Source: Item 5 — Initial Fees (FDD pages 16–20)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, the application fee is refundable under specific conditions. If a prospective franchisee withdraws their franchise application before Caption By Hyatt approves it, or if Caption By Hyatt does not approve the application for any reason, the application fee will be refunded. However, Caption By Hyatt will deduct a $7,500 fee to cover the costs of evaluating the application. Once Caption By Hyatt approves the franchise application, the application fee becomes non-refundable, regardless of whether a Franchise Agreement is ultimately signed.
For a new Caption By Hyatt hotel, the initial application fee is $95,000, with an additional $500 for each guest room exceeding 200. For existing Brand Hotel acquisitions, the application fee is $150,000. This refund policy is an important consideration for potential franchisees, as it provides a limited opportunity to recover a portion of the initial investment if the application is withdrawn or denied. However, the $7,500 deduction should be factored into the franchisee's financial planning.
It is fairly common practice in the franchise industry to have non-refundable application fees or to deduct costs from application fee refunds to cover processing and evaluation expenses. The $7,500 deduction by Caption By Hyatt is substantial and prospective franchisees should be aware of this potential cost. Franchisees should carefully consider the likelihood of approval before submitting their application to Caption By Hyatt, as the majority of the application fee is at risk once the application is approved by the franchisor.