Hyatt Regency Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$73,485,976 - $492,565,733
Franchise Fee
$100,000
Total US Locations
103
Business Summary
Hyatt Regency offers franchises to operate upscale, full-service hotels under the Hyatt Regency® brand. These hotels typically feature between 250 and 500 guest rooms, providing a complete range of food and beverage facilities, banquet services, and meeting and convention spaces. The hotels target both corporate business travelers and families seeking leisure travel.
Corporate History
Hyatt Franchising, L.L.C. is a Delaware limited liability company that was originally incorporated as Hyatt Franchise Corporation. While the specific incorporation year for Hyatt Franchising, L.L.C. is not provided, its parent company, Hyatt Hotels Corporation, has owned, operated, and managed hotels since 1957. Hyatt Franchising, L.L.C. first offered franchises for Brand Hotels from December 1994 to April 1997, and then resumed offering them in September 2006, continuing to do so for full-service hotels under the Hyatt® name until January 2015. The company has also offered franchises under other brands like Hyatt Centric®, The Unbound Collection by Hyatt®, Destination by Hyatt®, JdV by Hyatt®, Caption by Hyatt®, and Hyatt Studios™.
Financial Overview
Investment Range
$73,485,976 - $492,565,733
Franchise Fee (Low)
$100,000
Franchise Fee (High)
$400,000
Minimum Net Worth
$7,348,000
Royalty %
6%
Marketing %
1.35%
Equipment Costs (Low)
$67,222,950
Equipment Costs (High)
$458,996,000
Working Capital
$1,250,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Hyatt Hotels Corporation's independent auditors issued an unqualified opinion on the consolidated financial statements. The auditors highlighted two critical audit matters: deferred revenue related to the loyalty program, valued at $1,333 million as of December 31, 2024, which is actuarially determined and involves significant judgment, particularly regarding breakage assumptions. The second matter concerned goodwill, with a balance of $2,541 million as of December 31, 2024, and $1,116 million related to one reporting unit. The company recognized $110 million in goodwill impairment charges, with the fair value determination requiring significant assumptions and judgments related to future cash flows, discount rates, and capitalization rates. These estimates require a higher degree of auditor judgment and effort.
Financing Details
Hyatt Franchising, L.L.C. typically does not have a fixed financial assistance program for its franchisees and generally does not offer direct or indirect financial assistance. The company does not guarantee any franchisee's note, lease, or other financial obligations. However, in some cases, Hyatt Franchising, L.L.C. may periodically offer financial assistance to franchisees who are developing new Hyatt Regency hotels or converting existing hotels to the Hyatt System. There are no formal criteria for determining which franchisees will receive this assistance, and the terms, including the amount, interest rate, and repayment schedule, will vary widely based on the agreement with the franchisee and their specific situation. The decision to offer assistance is at Hyatt Franchising, L.L.C.'s discretion, based on what it deems best for the company and the Hyatt Regency franchise network, and there is no obligation to provide such assistance to any franchisee.
Performance Metrics
Total US Locations
103
Franchised Units
41
Corporate Units
59
Avg Square Footage
261,360
Franchising Since
2006
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
1
Litigation Summary
Hyatt Franchising, L.L.C. brought one claim against franchisees in the 2024 fiscal year. This litigation, titled Hyatt Franchising, L.L.C. v. Imperial Hotels, LLC, Sunikumar Patel, Akash Maheshwari, Roshni Jariwala Desai, Madhvan Nair, Daksha Patel, Sanjay Desai, Raj Gandhi, Usha Patel, Vinod Jayrambhai Patel and Mina Jariwala, (No. 01-24-0008-8964 (AAA 2024)), involved unpaid royalty fees. This is the only litigation reported for Hyatt Regency that is required to be disclosed.
Bankruptcy History
Hyatt Franchising, L.L.C. has no bankruptcy history to report. No bankruptcy information is required to be disclosed in Item 4 of this Franchise Disclosure Document.
Agreement Terms
Initial Term
20 years
Renewal Term
10 years
Renewal Conditions
To renew their Hyatt Regency franchise agreement, franchisees must have substantially complied with the agreement throughout its term and be in full compliance at the time of expiration. They must meet Hyatt's then-current standards for franchisees and have received passing quality assurance scores on all evaluations during the preceding three years. Additionally, franchisees must have the right to maintain possession of the hotel for at least 10 years following the agreement's expiration. As part of the renewal, they are required to renovate, remodel, or expand the hotel and its furniture, fixtures, and equipment (FF&E), give Hyatt notice of their intent to renew, sign Hyatt's then-current form of agreement and ancillary documents (which may have materially different terms and fees), pay a Property Improvement Plan (PIP) fee, and sign general legal releases.
Training & Support Program
Franchisor Assistance
Before the hotel opens, Hyatt Regency assists with approving the site and provides technical and design guidance for developing or renovating the hotel in line with its Design and Construction Standards. Hyatt Regency identifies approved FF&E and suppliers, reviews and approves initial design and renovation plans, and helps establish a pre-opening sales office. It also provides pre-opening system services, access to its central reservation system, and initial training for the hotel's Core Management team, including a General Manager University program and on-site pre-opening training. During operation, Hyatt Regency continues to provide System Services, advises on hotel operations and System Standards, and allows the use of its proprietary marks, copyrighted materials, and confidential information. Franchisees also receive access to the central reservation system and advertising listings, along with periodic quality assurance inspections. The franchisor offers hosting and subscription services for the property management system, and optional or, in some cases, required revenue management services, field marketing program services, central sales services, global property guest services, and digital ancillary services. Additionally, supplemental and optional training programs are available throughout the franchise term.
Initial Training Hours
465
Training Location
Initial training for Hyatt Regency franchisees includes a combination of self-paced eLearning, virtual instructor-led training, and in-person sessions. In-person training primarily occurs at Hyatt's corporate headquarters in Chicago, Illinois, or a designated Hyatt hotel location. Some components of the training, particularly pre-opening brand training and certain operational programs, may also take place on-site at the franchisee's hotel.
Ongoing Support
After opening, Hyatt Regency franchisees receive ongoing support through various channels. Hyatt continues to provide System Services, including access to its central reservation system and listings in advertising publications. The franchisor offers advice on hotel operations, System Standards, and advertising and marketing materials. Regular support includes periodic inspections as part of the Quality Assurance and Compliance Program, and hosting and subscription services for the hotel's property management system. Additionally, franchisees have the option, and in some cases may be required, to utilize ongoing revenue management services, field marketing program services, central sales services, global property guest services, and digital ancillary services. Supplemental and optional training programs are also offered periodically for hotel personnel, and general managers must facilitate on-property training in areas such as safety, security, ethics, cybersecurity, and hygiene.
Franchise Requirements
Ideal Candidate Profile
Hyatt Regency primarily seeks entities, rather than individuals, to acquire its franchises. Applicants and their affiliated entities should have a net worth of at least $7,348,000. While not explicitly required, prior experience or familiarity with the hotel system and hospitality industry is preferred, as lacking such experience may necessitate additional pre-opening services. The franchisee must also secure an approved management company or be approved to manage the hotel themselves, ensuring that the managing entity's personnel meet Hyatt's minimum qualifications and complete all required brand standard training programs. This implies a need for strong management capabilities within the operating entity.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
supervisory
Territory Type
limited
Territory Size Requirements
Hyatt Regency franchisees receive an Area of Protection with boundaries typically defined by geographic references like streets or rivers, or as a circular radius. The size of this area varies, ranging from a few blocks in urban settings to about a 3-mile radius from the hotel's entrance in certain suburban areas, depending on the hotel's size and location. This Area of Protection applies only for a specific term, usually 1 to 5 years after the hotel's opening date. After this term expires, or under specific exceptions such as the franchisor acquiring other hotel groups, Hyatt Regency and its affiliates may establish other brand hotels or competing brands within the former Area of Protection.
Staffing Notes
Hyatt Regency requires a Core Management team to be in place at the hotel at all times, consisting of positions such as a general manager, assistant general manager, rooms director, director of sales, engineering director, director of food and beverage, director of catering, and executive chef. These Core Management personnel must devote all their working time to supervising the hotel's day-to-day operations and cannot hold concurrent positions in other lodging facilities. The franchisee, or an approved management company, is solely responsible for hiring, firing, and disciplining all hotel employees and determining their employment terms. If a revenue manager is retained, they must be certified by Hyatt and cannot provide services to more than 20 Brand Hotels. The hotel's general manager is responsible for facilitating staff training in areas like safety, security, ethics, cybersecurity, and hygiene.