What is the year of guarantee expiration for Caption By Hyatt's 'All foreign' geographical region?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
ities on our consolidated balance sheets related to these performance cure payments.
Debt Repayment Guarantees—We enter into various debt repayment guarantees in order to assist third-party owners, franchisees, and unconsolidated hospitality ventures in obtaining third-party financing or to obtain more favorable borrowing terms.
| Geographical region | Maximum potential future payments (1) | Maximum exposure net of recoverability from third parties (1) | Other long term liabilities recorded at December 31, 2024 | Other long term liabilities recorded at December 31, 2023 | Year of guarantee expiration (2) |
|---|
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to the 2025 FDD, Caption By Hyatt's performance guarantees for its 'All foreign' geographical region expire in various years through 2026. This indicates that Hyatt Hotels Corporation, as the guarantor, has committed to ensuring certain performance levels are met by Caption By Hyatt hotels located outside the United States until that time.
For a prospective Caption By Hyatt franchisee considering opening a location in a foreign market, this guarantee provides a level of financial security. Should the hotel's operating profit not reach the levels specified in their agreement, Hyatt Hotels Corporation would be obligated to make payments to the owner, up to the maximum exposure amount. This guarantee can help mitigate some of the financial risks associated with launching a new hotel, particularly in an unfamiliar market.
It's important for potential franchisees to understand the specific terms and conditions of these performance guarantees. This includes the exact performance levels that trigger the guarantee, the calculation methods for operating profit, and the maximum potential payments. Additionally, franchisees should inquire about the factors that could affect the likelihood of the guarantee being invoked, such as local market conditions and the hotel's operating strategy. Understanding these details is crucial for assessing the overall financial viability and risk profile of a Caption By Hyatt franchise in a foreign location.