The Unbound Collection by Hyatt Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$46,830,426 - $161,465,733
Franchise Fee
$100,000
Total US Locations
18
Business Summary
The Unbound Collection by Hyatt offers a unique upscale accommodations and hospitality affiliation under a separate tradename that the franchisee owns, but which is affiliated with The Unbound Collection by Hyatt brand. The business involves operating a hotel with multiple rooms for overnight guests, with each hotel designed to be unique and reflect its local market.
Corporate History
Hyatt Franchising, L.L.C. incorporated in Delaware as Hyatt Franchise Corporation before converting to an LLC. The company began offering franchises for full-service hotels under the Hyatt brand in December 1994 and has been offering franchises for The Unbound Collection by Hyatt Brand Hotels since June 2016. Its parent company, Hyatt Hotels Corporation, has a long history in the hospitality industry, owning, operating, and managing hotels since 1957. Hyatt Franchising, L.L.C. itself has not operated Brand Hotels but manages the franchising operations for various Hyatt-affiliated brands.
Financial Overview
Investment Range
$46,830,426 - $161,465,733
Franchise Fee (Low)
$100,000
Franchise Fee (High)
$135,600
Minimum Net Worth
$7,348,000
Royalty %
7%
Marketing %
3.5%
Equipment Costs (Low)
$9,666,550
Equipment Costs (High)
$20,621,000
Working Capital
$950,000
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., operates with audited consolidated financial statements that received an Unqualified opinion from its independent auditors, Deloitte & Touche LLP. The auditors highlighted two critical audit matters: the valuation of deferred revenue related to the loyalty program ($1,333 million as of December 31, 2024), where changes in estimates could materially impact the liability, and goodwill impairment analyses, where $110 million in goodwill impairment charges were recognized in 2024 due to the carrying value of a reporting unit exceeding its fair value. A 5% decline in underlying cash flows or a 1% increase in discount or capitalization rates could lead to further material impairment. The consolidated balance sheet for Hyatt Hotels Corporation shows negative working capital of $541 million as of December 31, 2024. However, the franchisor entity, Hyatt Franchising, L.L.C., has positive working capital of $7,752,857 as of December 31, 2024 (from unaudited balance sheet). Hyatt Hotels Corporation absolutely and unconditionally guarantees the performance of Hyatt Franchising, L.L.C.'s obligations to franchisees under the Franchise Agreement.
Financing Details
Hyatt Franchising, L.L.C. does not have a fixed financial assistance program for its franchisees and typically does not offer financial assistance. However, in some cases, it may periodically offer financial assistance to franchisees developing new Brand Hotels or converting existing hotels. The specific terms of any financial assistance, including the amount, interest rate, and repayment terms, will vary depending on the agreement with the franchisee and their particular circumstances. The franchisor has no formal criteria for determining which franchisees receive assistance, or the amount or timing of such assistance. Hyatt Franchising, L.L.C. or its affiliates do not guarantee a franchisee's note, lease, or other obligation.
Performance Metrics
Total US Locations
18
Franchised Units
10
Corporate Units
8
Franchising Since
1994
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
1
Litigation Summary
Hyatt Franchising, L.L.C. has disclosed one litigation case during its 2024 fiscal year. This case, filed in 2024, is an arbitration proceeding against Imperial Hotels, LLC and several individuals for unpaid royalty fees.
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 the franchise agreement, The Unbound Collection by Hyatt franchisees must have substantially complied with the agreement throughout its term and be in full compliance at the time of expiration. They must also meet the franchisor's then-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. As part of renewal, franchisees are required to renovate, remodel, or expand the Hotel and its furniture, fixtures, and equipment to meet current brand standards, provide advance notice, sign the then-current form of franchise agreement and other ancillary documents (which may differ materially), pay a Property Improvement Plan (PIP) fee, and sign general legal releases (if state law permits).
Training & Support Program
Franchisor Assistance
Hyatt Franchising, L.L.C. provides comprehensive assistance and support to The Unbound Collection by Hyatt franchisees, covering both pre-opening and ongoing operations. Before the hotel opens, the franchisor helps with site approval, provides design and construction standards, identifies approved FF&E and other items, and approves initial design documents, F&B operations plans, and pre-opening marketing programs. It also provides IT project management services, access to its central reservation system (CRS) and advertising listings, and mandatory training for the Core Management team and other hotel personnel. For ongoing support, The Unbound Collection by Hyatt franchisees continuously receive System Services, operational advice, and access to System Standards. The franchisor conducts periodic inspections through its Quality Assurance and Compliance Program and provides hosting services for the property management system. Additionally, franchisees can opt-in (or may be required in certain circumstances) for revenue management, field marketing, central sales, global property guest services, and digital ancillary services. The franchisor also mandates ongoing training for replacement Core Management personnel and may require participation in regional or national conventions.
Initial Training Hours
479
Training Location
Corporate headquarters in Chicago, Illinois, a designated Hyatt hotel location, or virtually, and on-site at the Hotel.
Ongoing Support
After opening, The Unbound Collection by Hyatt franchisees receive continuous System Services from the Hyatt Group. The franchisor periodically advises on hotel operations, System Standards, and marketing. Franchisees have access to the Proprietary Marks, Confidential Information, and Copyrighted Materials, along with the System Standards, the central reservation system (CRS), and advertising listings. Ongoing 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. Franchisees may also choose to acquire (or may be required in some situations) optional services such as revenue management, field marketing, central sales services, global property guest services add-ons, and digital ancillary services. The franchisor requires replacement Core Management personnel to complete mandatory brand standard training programs within 90 days and may require Core Management and other personnel to attend regional and national conventions and other brand standard training programs.
Franchise Requirements
Ideal Candidate Profile
Hyatt Franchising, L.L.C. primarily seeks business entities, rather than individuals, to acquire a franchise for The Unbound Collection by Hyatt. These entities must have owners, or individuals within the entity, who can sign a Guaranty and meet a specified Guarantor Monetary Threshold, ensuring sufficient financial capacity. The franchisor expects Brand Hotels to be unique properties reflecting their local market, implying the franchisee or its management entity should be capable of developing a distinct brand identity. While prior experience with the System is beneficial, it is not explicitly required, as the franchisor may offer additional pre-opening services to those who lack it. The franchisee or an approved management company must retain and exercise direct management control over all aspects of the hotel's business.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Commercial
Owner Participation
supervisory
Territory Type
limited
Territory Size Requirements
The Unbound Collection by Hyatt franchisees typically receive an Area of Protection with boundaries defined by geographic references like streets or rivers, or as a circle with the hotel at its center. The size of this protected area varies based on the hotel's size and location, ranging from a few city blocks in densely populated urban areas to approximately a 1- to 2-mile radius from the hotel's entrance in less populated areas.
Staffing Notes
The Unbound Collection by Hyatt requires that either the franchisee (if approved to manage the hotel) or an approved management company retain direct management control over all aspects of the hotel's business and be the employer of the Core Management team and other personnel. The Core Management team, which includes positions like general manager, assistant general manager, rooms director, director of sales, engineering director, director of food and beverage, director of catering, and executive chef, must be in place and trained at all times. Core Management members must dedicate all their working time to the hotel and cannot hold concurrent positions in other lodging facilities. If a hotel's general manager does not meet quality assurance standards, the franchisor may require a replacement. Revenue managers must be certified and can manage services for no more than 20 Brand Hotels. The hotel's general manager is responsible for facilitating staff training in areas like safety, security, ethics, de-escalation, cybersecurity, and hygiene.