How much does a Hyatt House franchise cost?
A new 128-room Hyatt House hotel has a disclosed total estimated initial investment of $26,934,987 to $33,427,565. The 2026 U.S. Franchise Disclosure Document states that this range excludes real estate costs, including the purchase price of land or a building, property rent, and the property-related security deposit. It also excludes financing charges, interest, and debt service.
This is the 2026 Item 7 range for constructing and opening a new, full-size 128-room Hyatt House hotel. It includes three months of Additional Funds but not the underlying real estate. Source: 2026 FDD, Item 7, pp. 29–33.
Data basis. Legal franchisor: Hyatt House Franchising, L.L.C. Issuance date: March 27, 2026. Applicable model: a newly constructed, full-size 128-room U.S. Hyatt House hotel. Cost disclosures reviewed: Items 5, 6, and 7, with cost-relevant provisions from Items 8, 10, 11, 15, and 17. Information checked July 15, 2026.
The official Hyatt House development page confirms the brand's owner-development channel. A matching public copy of the March 27, 2026 FDD was not located on an official franchise-controlled domain; Hyatt instead provides an official FDD request page. FDD figures below therefore use unlinked Item and page references.
Capital snapshot
The hotel asset, not the application payment, drives the capital requirement. The FDD cover states that $106,095 to $760,013 of the total is paid to the franchisor or an affiliate; most of the disclosed investment goes to construction, design, equipment, supplies, licenses, employees, and other third parties. Source: 2026 FDD cover page and Item 7, pp. 29–33.
What is included in the $26.93 million to $33.43 million range?
The 2026 Item 7 estimate includes the development, fit-out, technology, pre-opening, training, and initial operating costs for the 128-room new-build model. Construction is the largest category, followed by Furniture, Fixtures, Other Fixed Assets and Equipment, Operating Supplies & Equipment, and Architecture and Design.
| Cost entity | 2026 range | What it covers | FDD reference |
|---|---|---|---|
| Construction, improvements, remodeling, decorating costs and other sitework | $22,677,248–$25,877,248 | General construction, improvements and sitework; some technology installation is included here. | Item 7, p. 30 |
| Furniture, Fixtures, Other Fixed Assets and Equipment | $1,792,000–$2,944,000 | Hotel FF&E other than separately disclosed technology and OS&E. | Item 7, pp. 30, 32 |
| Operating Supplies & Equipment | $640,000–$1,024,000 | Initial food and beverage inventory, linens, amenities, cleaning supplies and consumables. | Item 7, pp. 30, 32 |
| Architecture and Design | $576,000–$832,000 | Architects, engineers, designers and related professionals. | Item 7, p. 30 |
| Additional Funds | $276,000–$525,000 | Three months of initial startup expenses, including payroll but excluding management fees or a similar draw. | Item 7, pp. 31, 33 |
| General and administrative buildout costs | $320,000–$500,000 | Permits, utility and other deposits, impact and tap fees, licenses, insurance, legal and accounting expenses. | Item 7, pp. 30, 32 |
The light segment represents the disclosed low amount; the dark segment represents the additional spread to the disclosed high amount.
Interpretation: construction accounts for most of the disclosed capital requirement and most of the absolute range movement. Official figures; no midpoint or typical case is implied. Source: 2026 FDD, Item 7, pp. 29–33.
The total does not resolve the cost of acquiring or leasing the hotel real estate, property rent, property-related security deposit, financing charges, interest, or debt service. Because Hyatt House hotels typically require substantial real estate and a purpose-built or converted lodging asset, those exclusions can materially increase the capital and borrowing package beyond the official Item 7 total. Source: 2026 FDD, Item 7, p. 33.
When is the money paid?
The 2026 FDD does not require the entire $26.93 million to $33.43 million at one moment. Cash is committed in stages: application, design and approvals, construction and procurement, pre-opening preparation, and the first three months of operation.
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1
Franchise applicationA new-development applicant pays the $75,000 Application Fee as a lump sum. A conversion or purchase of an existing Brand Hotel may also require the $5,000 to $10,000 PIP Preparation Fee. The Application Fee is refundable less $7,500 only if the applicant withdraws before approval or Hyatt does not approve the application; after approval it is non-refundable. Source: 2026 FDD, Item 5, pp. 9–10.
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2
Design, lender and development approvalsDesign Review of $5,000 to $45,000, comfort-letter fees of up to $2,500 per negotiated letter, and IT Project Management expense reimbursement of $6,695 to $11,330 arise as the project advances. Most construction, architecture, signage, technology and equipment payments are made to contractors and suppliers as incurred. Source: 2026 FDD, Items 5 and 7, pp. 10–11 and 29–30.
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3
At least 120 days before openingThe franchisee must submit a pre-opening marketing program that contemplates spending at least $500 per guest room. For the disclosed 128-room model, that formula equals $64,000 (128 × $500), a derived calculation that matches the low end of the Item 7 Pre-Opening Marketing and Sales Expenses range. Source: 2026 FDD, Item 11, pp. 41–42, and Item 7, p. 30.
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4
Before the opening team arrivesInitial orientation and training fees of $15,750 to $34,500 are invoiced before Hyatt's pre-opening team arrives, with an additional estimated $3,650 to $7,513 for Hyatt personnel's travel and living expenses. The franchisee also bears its own attendees' travel and living costs. Source: 2026 FDD, Item 5, p. 10, and Item 7, p. 31.
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5
Opening and the first three monthsItem 7 includes $276,000 to $525,000 of Additional Funds for three months. It also includes specified pre-opening or initial-period marketing and revenue-management amounts. These are already inside the official total and must not be added a second time. Source: 2026 FDD, Item 7, pp. 30–33.
The 2026 FDD does not disclose a separate line named “Initial Franchise Fee.” For a new hotel, the principal upfront franchisor payment is the Application Fee. A change of ownership uses a different $150,000 Application Fee, so the $75,000 new-development amount should not be applied to an acquisition of an existing Hyatt House hotel. Source: 2026 FDD, Item 5, p. 9.
Which fees continue after a Hyatt House opens?
After opening, the main percentage charges are a 5% Royalty Fee and a 3.5% Commercial Services Fee, each based on Gross Rooms Revenue from the previous month. Other mandatory charges use different bases, including digital-channel revenue, eligible World of Hyatt revenue, reservations, rooms, and allocated service costs.
| Fee or reserve | Amount or basis | Timing | FDD reference |
|---|---|---|---|
| Royalty Fee | 5% of Gross Rooms Revenue | Monthly, based on the previous month | Item 6, pp. 13, 22 |
| Commercial Services Fee | 3.5% of Gross Rooms Revenue | Monthly, based on the previous month | Item 6, pp. 18, 26 |
| Digital Acquisition Fee | 1.35% of Gross Rooms Revenue through Digital Channels | Payment Day | Item 6, p. 18 |
| World of Hyatt program assessment | 4% of eligible revenue; 2% for an on-property enrolling stay | Monthly | Item 6, pp. 13, 22 |
| PMS subscription | $3.90 per room per month | Monthly | Item 6, p. 14 |
| Mandatory contracts | $1,500–$7,500 per month | Payment Day | Item 6, p. 19 |
| Other corporate services | $500–$5,000 per month | Payment Day | Item 6, p. 19 |
| Capital expenditure reserve | 3%, then 4%, then 5% of Gross Rooms Revenue | Monthly deposit into a separate account controlled by the franchisee | Item 8, pp. 36–37 |
The reserve is deposited into a separate account controlled by the franchisee and is used for approved capital expenditures and renovation obligations.
Interpretation: this reserve is a separate liquidity obligation, not an extra royalty paid to Hyatt, and actual required renovations may cost more than the account balance. Source: 2026 FDD, Item 8, pp. 36–37.
Do not add the 5%, 3.5%, 1.35%, and World of Hyatt percentages into one universal fee rate. The FDD assigns different denominators: Gross Rooms Revenue, Gross Rooms Revenue through Digital Channels, and eligible World of Hyatt revenue. The capital reserve is also a deposit into the franchisee's own restricted account rather than a payment to the franchisor.
Does the same cost range apply to a conversion or an existing Hyatt House?
No. The $26.93 million to $33.43 million range applies only to a newly constructed, full-size 128-room hotel. The 2026 FDD does not provide a separate complete Item 7 total for converting another hotel, adapting an existing structure, or purchasing an existing Hyatt House.
Application Fee: $75,000.
Official Item 7 total: $26,934,987 to $33,427,565, excluding real estate.
Cost basis: construction under Hyatt's Design and Construction Standards, plus the disclosed equipment, supplies, pre-opening and working-capital categories.
PIP Preparation Fee: $5,000 to $10,000 for a conversion or purchase of an existing Brand Hotel.
Change of ownership Application Fee: $150,000 when purchasing an existing Brand Hotel.
Official total: not disclosed as a separate full range. The Property Improvement Plan determines required upgrades, and renovation cost varies with the asset's condition and existing FF&E.
A conversion can avoid some ground-up costs already embedded in the asset, but the FDD warns that significant renovation and upgrade costs still apply. The PIP is prepared before the Franchise Agreement is signed and identifies the work required to meet current Brand Hotel standards. Source: 2026 FDD, Item 5, pp. 9–10; Item 7, p. 33; Item 11, pp. 41–42.
What liquid capital or net worth does Hyatt House require?
The 2026 FDD does not publish one standardized liquid-capital or net-worth number that applies to every Hyatt House project. Instead, Hyatt sets a transaction-specific Guarantor Monetary Threshold before signing and records the required net-worth and liquid-asset minimums in Exhibit B-1 to the Franchise Agreement.
- Net-worth component
- Total assets minus total liabilities, excluding Hotel assets and liabilities relating solely to the Hotel, measured under U.S. generally accepted accounting principles.
- Liquidity component
- Cash, cash equivalents and marketable securities in the minimum amount Hyatt inserts in Exhibit B-1.
- Who must maintain it
- At least one guarantor must satisfy both components throughout the Franchise Agreement term and provide annual supporting financial information.
- Annual adjustment
- The threshold increases annually by the CPI Increase formula stated in the agreement, using the Consumer Price Index for All Urban Consumers. The Bureau of Labor Statistics CPI is the referenced government index family.
The practical capital test is therefore project-specific: a buyer must fund the Item 7 investment, separately resolve the excluded real estate and financing package, and maintain the guarantor thresholds specified for that transaction. Source: 2026 FDD, Item 15, pp. 67–68.
Request the completed Exhibit B-1 before treating any stated liquidity or net-worth figure as final. A broker or directory estimate cannot substitute for the transaction-specific Guarantor Monetary Threshold in the Franchise Agreement.
Which later events can create additional Hyatt House costs?
Compliance failures, late payments, supplier substitutions, ownership changes, extensions, renewal, and termination can create costs that are not part of the ordinary monthly fee schedule. These obligations vary by event and should not be treated as routine opening expenses.
- Opening deadline extensionA written extension request generally requires a $10,000 Extension Fee at least three months before the opening deadline; the fee is refunded only if Hyatt denies the request. Item 5, p. 11.
- Quality-assurance and compliance programsFocused Improvement Policy or Brand Compliance Program fees currently range from $5,000 to $20,000 per applicable stage, plus expenses; Brand Protection Program fees are currently $45,000 per year. Item 6, pp. 13, 23.
- Failed inspectionAn annual on-site inspection currently costs $1,500 to $2,000, and a required reinspection after failure currently costs $2,000. Item 6, p. 14.
- Alternative supplier or product reviewHyatt's current review cost is $20,000 when the franchisee seeks approval of an alternative product or supplier. Item 6, p. 16.
- Late paymentThe current charge is a $225 late fee plus interest at the lesser of 1.5% per month or the highest lawful rate. Item 6, p. 16.
- Transfer or change of ownershipThere is no separately named Transfer Fee, but the transferor or transferee must pay the then-current change-of-ownership Application Fee, currently $150,000; if Hyatt disapproves the transfer, the fee is refunded less $7,500. Item 6, p. 15, and Item 17, pp. 72–73.
- Successor franchiseRenewal is a 10-year successor franchise on then-current terms and requires a then-current PIP fee, currently $5,000 to $10,000, plus any required renovation, remodeling, expansion, or FF&E work. Items 6 and 17, pp. 16 and 69–70.
Early termination can also produce liquidated damages calculated under the Franchise Agreement, including a formula based on lost Royalty Fees and Commercial Services Charges. Because that amount depends on remaining term and revenue definitions, the 2026 FDD does not disclose one fixed termination dollar amount. Source: 2026 FDD, Item 6, pp. 16, 23–25.
What should a buyer verify before relying on the official range?
A buyer should reconcile the 2026 Item 7 model to the actual site, asset condition, financing structure, mandatory-service classifications, and transaction-specific guarantor thresholds. The official range is a defined disclosure model, not a site-specific construction budget.
- Confirm the development path. Determine whether the transaction is a new build, conversion, or change of ownership; only the new 128-room model has a complete Item 7 total.
- Price the excluded real estate separately. Obtain the land or building purchase terms, property rent, property-related deposit, financing charges, interest, and debt service outside the Item 7 total.
- Obtain the project PIP and approved plans. Conversion and existing-hotel renovation obligations cannot be estimated from the new-build range alone.
- Verify local liquor-license treatment. The Item 7 range is $30,000 to $400,000, but the FDD states that quota-market costs can exceed the high end.
- Identify which System Services are mandatory. Hyatt may classify some services differently based on the Hotel's size, location, market positioning, management-company approval, or compliance status.
- Review Exhibit B-1. Record the transaction-specific net-worth and liquidity minimums and model their annual CPI adjustment.
- Do not assume Hyatt financing. Item 10 states that Hyatt has no fixed assistance program, typically does not offer financial assistance, and does not guarantee notes, leases, or obligations.
The FTC Franchise Rule explains the federal disclosure framework, while the current 16 CFR Part 436 text contains the disclosure requirements. These sources explain what an FDD must disclose; they do not replace the Hyatt House Franchise Agreement, Item 7 assumptions, PIP, or project contracts.
What is the clearest way to interpret the Hyatt House cost?
The verified starting point is $26,934,987 to $33,427,565 for a new 128-room Hyatt House hotel, excluding real estate. Construction and the hotel asset dominate the capital requirement; the $75,000 Application Fee is only one early payment. Additional Funds cover three months and are already included. After opening, percentage fees, per-room charges, allocated System Services, and a 3% to 5% capital reserve continue. The largest unresolved buyer-specific questions are the real-estate and financing package, the conversion PIP where applicable, and the Guarantor Monetary Threshold inserted in Exhibit B-1.