Caption By Hyatt Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$28,378,455 - $87,964,018
Franchise Fee
$95,000
Total US Locations
2
Business Summary
Caption by Hyatt offers franchises to operate select service, urban lifestyle brand hotels. These hotels feature attractively-designed, modern rooms with state-of-the-art technology, design, and entertainment components, typically located in primary and secondary cities. Caption by Hyatt hotels provide guests with free high-speed Internet access, a fitness center, and food and beverage options covering three meals a day.
Corporate History
Hyatt Franchising, L.L.C. was initially incorporated in Delaware as Hyatt Franchise Corporation before converting to its current limited liability company form. The franchisor began offering franchises for select service, lifestyle hotels under the Caption by Hyatt® brand in September 2019. The company also franchises other Hyatt brands, with offerings dating back to December 1994 for some full-service hotels under the Hyatt Regency® name. Its parent company, Hyatt Hotels Corporation, has a long history in the hotel industry, owning, operating, and managing hotels since 1957.
Financial Overview
Investment Range
$28,378,455 - $87,964,018
Franchise Fee (Low)
$95,000
Franchise Fee (High)
$150,000
Minimum Net Worth
$7,348,000
Royalty %
5%
Marketing %
3.5%
Equipment Costs (Low)
$4,638,600
Equipment Costs (High)
$15,477,650
Working Capital
$517,500
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Hyatt Hotels Corporation, the parent company of Caption by Hyatt, provides audited consolidated financial statements that received an unqualified opinion from its independent auditors. However, the auditors identified "Deferred Revenue Related to the Loyalty Program" and "Goodwill" as critical audit matters. Specifically, a $110 million goodwill impairment charge was recognized in 2024 because the carrying value of a reporting unit in the management and franchising segment exceeded its fair value, indicating a financial concern related to certain assets. Despite this, Hyatt Hotels Corporation unconditionally guarantees the performance of Caption by Hyatt's obligations to franchisees, which indicates strong backing.
Financing Details
Caption by Hyatt does not have a fixed financial assistance program and typically does not offer financing to franchisees. However, in some cases, the franchisor may periodically offer financial assistance to franchisees who are developing new Caption by Hyatt hotels or converting existing hotels to the Caption by Hyatt system. There are no formal criteria to determine which franchisees receive assistance, and the terms, including amount, interest rate, and repayment, vary widely based on individual agreements and circumstances. Caption by Hyatt has no obligation to offer financial assistance, and neither the franchisor nor its affiliates guarantee franchisee notes, leases, or obligations.
Performance Metrics
Total US Locations
2
Franchised Units
1
Corporate Units
1
Franchising Since
2019
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
1
Litigation Summary
Caption by Hyatt has one disclosed litigation case in its recent history. In 2024, Hyatt Franchising, L.L.C. filed a claim against Imperial Hotels, LLC and several individuals for unpaid royalty fees. This arbitration proceeding is identified as No. 01-24-0008-8964 (AAA 2024). No other litigation is required to be disclosed.
Bankruptcy History
Caption by Hyatt has no bankruptcy history to disclose in this FDD document.
Agreement Terms
Initial Term
20 years
Renewal Term
10 years
Renewal Conditions
To renew with Caption by Hyatt, franchisees must have substantially complied with their franchise agreement during its initial term and be in full compliance at the time of expiration, including all system standards. They must also meet Caption by Hyatt's current standards for franchisees and owners, have received passing quality assurance scores on all evaluations over the past three years, and have the right to possess the hotel for at least ten years after the initial agreement ends. If these conditions are met, franchisees can acquire a successor franchise for ten years. This process also requires franchisees to renovate, remodel, or expand the hotel and its furniture, fixtures, and equipment to meet current brand standards. They must provide notice, sign the then-current form of franchise agreement (which may have materially different terms, including fees) and any ancillary documents, pay a Property Improvement Plan (PIP) fee, and sign general releases, if permitted by state law.
Training & Support Program
Franchisor Assistance
Caption by Hyatt provides extensive assistance to its franchisees both before and during the operation of the hotel. Before opening, this includes approving the hotel site, communicating design and development specifications, identifying approved FF&E suppliers, approving initial design and renovation plans, approving food and beverage operations plans, approving pre-opening sales offices, providing pre-opening system services, approving pre-opening marketing programs, and installing data services for central reservations and global distribution systems. Caption by Hyatt also offers initial training for the hotel's Core Management team and provides access to its System Standards and authorization for the hotel to open. Franchisees also have the option to receive revenue management and field marketing services before opening. During operation, Caption by Hyatt continues to provide System Services, periodic advice on hotel operations, use of its Proprietary Marks, Confidential Information, and Copyrighted Materials. The franchisor conducts regular inspections as part of its Quality Assurance and Compliance Program and provides hosting and subscription services for the hotel's Property Management System. Additionally, franchisees can opt into ongoing revenue management, field marketing, central sales, global property guest services, or digital ancillary services.
Initial Training Hours
552
Training Location
Initial training for Caption by Hyatt franchisees takes place through a combination of virtual learning, self-paced eLearning, virtual instructor-led sessions, in-person workshops at Hyatt's corporate headquarters in Chicago, Illinois, at other designated Hyatt hotel locations, or on-site at the franchisee's hotel.
Ongoing Support
After opening, Caption by Hyatt franchisees receive ongoing support through various system services that are periodically updated. This includes periodic advice on hotel operations, such as System Standards and advertising materials. Franchisees also have continued access to and use of Caption by Hyatt's Proprietary Marks, Confidential Information, and Copyrighted Materials, as well as the Central Reservations System (CRS) and advertising listings. The franchisor conducts periodic quality assurance inspections and maintains a compliance program. Additionally, franchisees are provided with hosting and subscription services for the hotel's Property Management System. Optional ongoing services available include revenue management, field marketing, central sales, global property guest services, or digital ancillary services.
Franchise Requirements
Ideal Candidate Profile
Caption by Hyatt seeks franchisee entities or their parent or affiliates that have been in business for at least five years and possess a minimum net worth of $7,348,000. While specific experience for the franchisee entity is not detailed, the franchisor requires that either an approved management company or the franchisee (if approved as manager) retains direct management control and employs the hotel's Core Management. The management company or approved franchisee-manager must meet minimum qualifications and ensure their personnel complete required brand standard training programs.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Commercial
Owner Participation
Supervisory
Territory Type
Limited
Territory Size Requirements
The size and definition of the territory, referred to as the Area of Protection, will be agreed upon before signing the franchise agreement. Caption by Hyatt typically defines these boundaries using geographic references like streets or rivers, or as a circular area with the hotel at its center. The size of the Area of Protection varies depending on the hotel's size and location, ranging from a few blocks in urban areas to approximately a 3-mile radius from the hotel's entrance in certain suburban areas.
Staffing Notes
Caption by Hyatt hotels require a Core Management team, which includes a general manager, assistant general manager, rooms director, director of sales, engineering director, director of food and beverage, director of catering, and executive chef. The franchisee, its approved management company, or an approved food and beverage operator is responsible for hiring and properly training all Core Management and other hotel personnel. All Core Management members must dedicate their full working time to the hotel's management and operational responsibilities and cannot hold concurrent positions at other lodging facilities or in related industries. Franchisees are also required to facilitate training for on-property personnel in areas such as safety, security, ethics, de-escalation, cybersecurity, and hygiene, in addition to various brand standard training programs for other personnel as needed.