Hyatt Studios Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$12,188,106 - $21,863,907
Franchise Fee
$17,850
Business Summary
Hyatt Studios operates upper-midscale, extended-stay hotels that incorporate state-of-the-art technology, design, and entertainment components. These hotels are typically located in primary, suburban, secondary, and tertiary markets and offer complimentary grab-and-go breakfast, along with a best-in-class, 24-hour market providing a wide variety of options for guests seeking longer-term stays.
Corporate History
Hyatt Franchising, L.L.C. was originally incorporated in Delaware as Hyatt Franchise Corporation before converting to its current limited liability company form. Its parent company, Hyatt Hotels Corporation, has a deep history in hospitality, with its affiliate, Hyatt Corporation, owning, operating, and managing hotels since 1957. Hyatt Franchising, L.L.C. began offering franchises for its specific Hyatt Studios Brand Hotels in May 2023. The company has also offered and continues to offer franchises under various other Hyatt brands, such as Hyatt Regency, Hyatt Centric, and The Unbound Collection by Hyatt, among others.
Financial Overview
Investment Range
$12,188,106 - $21,863,907
Franchise Fee (Low)
$17,850
Franchise Fee (High)
$107,600
Minimum Net Worth
$7,348,000
Royalty %
5%
Marketing %
3%
Equipment Costs (Low)
$1,423,520
Equipment Costs (High)
$2,790,390
Working Capital
$300,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Hyatt Hotels Corporation, the parent company of Hyatt Franchising, L.L.C., appears to be in a strong financial position, reporting over $1.2 billion in net income for 2024 and total equity of $3.8 billion. The company absolutely and unconditionally guarantees the performance of Hyatt Franchising, L.L.C.'s obligations to franchisees. The independent auditors highlighted two critical audit matters: the estimation of a $1.3 billion deferred revenue liability related to the loyalty program, which relies on subjective breakage assumptions, and goodwill, where the company recognized $110 million in impairment charges because the carrying value of a reporting unit exceeded its fair value.
Financing Details
Hyatt Franchising, L.L.C. typically does not offer financing to franchisees and does not have a fixed financial assistance program. However, in some specific cases, the company may offer financial assistance to franchisees developing new Hyatt Studios hotels or converting existing hotels. There are no formal criteria for eligibility, and the terms of any financial assistance, including amount, interest rate, and repayment, vary widely based on individual circumstances and the company's discretion. Hyatt Franchising, L.L.C. is under no obligation to provide financial assistance and does not guarantee franchisee notes, leases, or other obligations.
Performance Metrics
Total US Locations
0
Franchised Units
0
Corporate Units
0
Franchising Since
2023
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
1
Litigation Summary
Hyatt Franchising, L.L.C. has a limited litigation history. In the 2024 fiscal year, Hyatt Franchising, L.L.C. initiated one arbitration claim against a group of franchisees for unpaid royalty fees. No other litigation is disclosed for Hyatt Franchising, L.L.C. or its management.
Bankruptcy History
Hyatt Franchising, L.L.C. has no bankruptcy history to report.
Agreement Terms
Initial Term
20 years
Renewal Term
10 years
Renewal Conditions
To renew their Hyatt Studios franchise agreement, franchisees must notify Hyatt Franchising, L.L.C. between 18 and 21 months before the current agreement expires and pay a non-refundable PIP fee. Franchisees must have substantially complied with the existing agreement and be in full compliance at expiration, meet Hyatt's current standards for new franchisees, have received passing quality assurance scores in the prior three years, and have rights to maintain possession of the hotel for at least 10 years after the agreement's expiration. They must also renovate, remodel, or expand the hotel and its furniture, fixtures, and equipment (FF&E) to meet current brand standards, sign Hyatt's then-current franchise agreement (which may have materially different terms and fees), and sign a general release of claims (if state law allows).
Training & Support Program
Franchisor Assistance
Hyatt Franchising, L.L.C. provides extensive assistance to Hyatt Studios franchisees both before and after the hotel opens. Prior to opening, the company helps with site approval, provides design and construction standards, approves design plans and food & beverage operations, and assists with IT project management services and installation of central reservation and other technology systems. Hyatt Franchising, L.L.C. also offers initial training for the owner/operator, general manager, and other key staff on hotel operations, sales, and revenue management. After opening, franchisees receive ongoing System Services, which include revenue management, field marketing, and sales lead qualifying services. The company also provides periodic operational advice, access to updated System Standards, continuous use of proprietary marks, and conducts quality assurance inspections. Additional, supplemental, and optional training programs are available, some of which may require fees, and mandatory training is provided for replacement management personnel.
Initial Training Hours
552
Training Location
Primarily conducted virtually, at Hyatt's corporate headquarters in Chicago, Illinois, or at a designated Hyatt hotel location, with some on-site training at the franchisee's hotel.
Ongoing Support
Hyatt Franchising, L.L.C. provides ongoing support to Hyatt Studios franchisees by continuing to deliver System Services, which include revenue management, field marketing, and sales lead qualifying services. The company offers periodic operational advice on system standards and marketing, and provides access to updated System Standards, proprietary marks, and confidential information. Franchisees also receive access to the central reservation system (CRS) and advertising listings, and benefit from periodic quality assurance inspections. Additional, supplemental, and optional training programs are available, some of which may require fees, and mandatory training is provided for replacement management personnel.
Franchise Requirements
Ideal Candidate Profile
Hyatt Franchising, L.L.C. expects its Hyatt Studios franchisees to be business entities with a parent or affiliate that has been in business for at least five years and has a net worth of at least $7,348,000 to qualify for certain exemptions. Franchisees must secure an approved management company or be approved themselves to directly manage the hotel, maintaining direct management control and employing the hotel's core management and staff. These entities are expected to have the financial resources to meet significant initial investment requirements, which range from over $12 million to nearly $22 million, and must provide a guarantor who satisfies specific net worth and liquidity thresholds.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Supervisory
Territory Type
Limited
Territory Size Requirements
Hyatt Franchising, L.L.C. defines the Hyatt Studios Area of Protection based on the hotel's size and location. This area can range from as small as a city block in urban environments up to approximately a 5-mile radius from the hotel's entrance in suburban areas.
Staffing Notes
Hyatt Studios hotels require a Core Management team, which includes a general manager and a sales director, who must devote all their working time to the hotel. Franchisees, or an approved management company, are responsible for hiring and training all Core Management and other hotel personnel, and must ensure that a Core Management team is always in place. The general manager is also responsible for facilitating on-property training for staff in areas like safety, ethics, cybersecurity, and hygiene. If a general manager fails to meet quality standards, Hyatt Franchising, L.L.C. may require the franchisee to hire a new general manager.