How to Finance a Hyatt Franchise: Full-Service Hotel Costs
By Chris Cornella
A Hyatt franchise loan finances a hotel, not just a business: land or an existing building, construction or renovation, a full package of furniture and fixtures, and often restaurants, bars and meeting space that a select-service property would never carry. The franchise agreement sits on top of all of that, setting the fees, the brand standards and the long relationship a lender will be underwriting.
This article explains how Hyatt’s franchise model works, what drives the cost of a full-service Hyatt hotel, what the brand’s SBA Franchise Directory listing means for borrowers, and how owners structure financing for new builds, acquisitions and conversions.
US Professional Funding is not affiliated with, sponsored by or endorsed by Hyatt; the name is used only to describe the business. Figures from the franchisor’s disclosure document and the company’s public reports can change, loan programs and terms vary by lender and borrower, and every loan is subject to lender review and approval. Nothing here is legal, tax or investment advice, and buyers should review the current Franchise Disclosure Document (FDD) and franchise agreement with a qualified franchise attorney and accountant.
Hyatt Franchise Loan at a Glance
- Franchise fees: according to the company’s annual report for 2025, franchisees generally pay an initial application fee and/or a design services fee, plus ongoing royalty fees.
- Royalty: typically a percentage of gross rooms revenues, ranging from 2.75% to 5% across Hyatt’s franchise agreements; some agreements use a combined rooms and food-and-beverage structure or a percentage of revenue booked through Hyatt’s channels.
- Franchise term: typically 20 years, with franchisees that have met their obligations typically able to enter a 10-year successor agreement.
- Estimated initial investment: set out in Item 7 of the FDD for the specific brand and hotel type; full-service projects vary widely with size, market and amenities.
- System size: 1,528 hotels and all-inclusive resorts with 372,763 rooms at December 31, 2025.
- Loyalty program: World of Hyatt had approximately 63 million members at year-end 2025.
- SBA Franchise Directory: listed, with an SBA-approved Hyatt Comfort Letter and a note on third-party management agreements.
What Is Hyatt?
Hyatt is a global hospitality company headquartered in Chicago, Illinois, with what it describes as an almost 70-year history. The company reported 1,528 hotels and all-inclusive resorts, totaling 372,763 rooms, at the end of 2025, and said its properties operate in 83 countries.
Hyatt’s system includes hotels it manages for owners, hotels it franchises and a smaller number it owns or leases. Its annual report says the company franchises full-service hotels, select-service hotels and all-inclusive resorts under certain brands, and that it does not participate in managing franchised hotels. Franchisees must operate to Hyatt’s brand standards, and the company approves the plans for, and the location of, every franchised hotel.
The Hyatt brand. Within Hyatt’s Classics portfolio, the company describes Hyatt hotels as smaller-sized properties in convenient business and leisure destinations, with contemporary guest rooms, well-designed social and dining spaces, and service built around warm, dependable hospitality and local knowledge. That combination of food and beverage, gathering space and full guest service is what distinguishes a full-service Hyatt hotel from a rooms-focused property in a loan request.
Growth and development. Hyatt reported net rooms growth of 7.3% for 2025 and a pipeline of about 148,000 rooms under executed management and franchise contracts at year-end, which it later updated to more than 154,000 rooms in October 2026. In the U.S., the company said 2025 signings rose 30% from the prior year to their highest level in five years, about half of them in markets new to Hyatt, and that more than 80% of its U.S. pipeline is new construction. Hyatt also says it averages four hotels per U.S. market compared with 14 for its largest competitors, and sees room to grow in more than 300 U.S. submarkets.
Why lenders view Hyatt the way they do. Hotel lenders generally value a recognized upscale flag, a large loyalty base and a long franchise term. They also know full-service hotels carry heavier operating costs, larger renovation cycles and more complex management than limited-service properties, so underwriting for a Hyatt franchise loan focuses on the sponsor, the market, the manager and the property’s cash flow.
Hyatt Franchise Costs
Hyatt publishes its franchise fee structure in each brand’s FDD rather than on a consumer-facing franchise page. Request the FDD for the specific brand and project type you are considering, and build your budget from its Item 5, Item 6 and Item 7 disclosures.
Initial fees. Hyatt’s annual report says franchisees generally pay an initial application fee and/or a design services fee. Item 5 of the FDD states the amounts, how they are calculated (often per room, with a minimum) and when they are due.
Land and construction. For a new-build full-service hotel, land, site work and vertical construction are usually the largest costs by far. Structured parking, kitchens, ballrooms and meeting rooms add square footage and mechanical systems that a select-service hotel does not need.
Furniture, fixtures and equipment (FF&E). Guest room furniture, case goods, bedding, televisions and in-room technology, plus lobby, restaurant and meeting-room furnishings, are a major budget line that must meet Hyatt’s brand standards.
Operating supplies and equipment (OS&E). Linens, kitchen smallwares, china and glassware, uniforms and banquet supplies are needed before opening.
Pre-opening costs and working capital. Hiring and training a large staff, pre-opening sales and marketing to book groups and events, technology setup and initial operating funds all fall before the hotel produces stable revenue.
Total investment. Item 7 of the current FDD provides the estimated initial investment range for the hotel type it describes, along with the assumptions behind it. For a full-service project, expect the Item 7 table to include categories such as:
- Initial application fee and design services fee
- Land acquisition or ground lease costs
- Site work, construction and contingency
- Architectural, engineering and design fees
- Furniture, fixtures and equipment
- Operating supplies and equipment
- Kitchen, bar and banquet equipment
- Technology, property management and reservation systems
- Signage
- Pre-opening sales, marketing, hiring and training
- Permits, licenses, insurance and professional fees
- Additional funds for the initial operating period
Lenders size the construction and permanent pieces of a Hyatt franchise loan from a full project budget that includes all of these, interest during construction and a contingency, then compare it with an appraisal and the projected cash flow.
Ongoing Fees and How They Affect Your Loan
Royalty. Hyatt’s annual report says royalty fees are typically a percentage of gross rooms revenues, typically ranging from 2.75% to 5%. Some agreements are structured differently, using a percentage of revenue from Hyatt’s booking channels or a combined rooms and food-and-beverage formula. The specific rate for your brand and agreement is in Item 6 of the FDD.
Marketing, loyalty and reservation charges. Hotel franchise systems typically charge for marketing, loyalty program participation and reservation services in addition to the royalty. Confirm each of Hyatt’s charges, how it is calculated and whether it can change, in Item 6.
Brand standards and renovation obligations. Franchise agreements require hotels to meet brand standards throughout the term, and properties are periodically renovated to keep them current. Plan for an FF&E reserve and future property improvement plans (PIPs) in the long-term budget. Our article on financing a hotel PIP explains how owners pay for brand-required renovations.
How lenders factor these costs in. Lenders build projections that subtract franchise fees, management fees, payroll, food and beverage costs, utilities, insurance, property taxes and a replacement reserve from total revenue, then measure what is left against debt service. Because royalties are tied to rooms revenue, they rise with performance, while labor and fixed costs in a full-service hotel stay high in slow seasons.
Franchisor Requirements for New Owners
Hyatt’s public materials do not publish a minimum net worth or liquidity figure for franchisees. In practice, Hyatt evaluates the owner, the site and the project before approving a franchise, and its annual report notes that the company approves the plans and location of franchised hotels.
What Hyatt and its lenders will look for:
- Hotel ownership or development experience: the factor that most shapes a Hyatt franchise loan, ideally a track record with comparable hotels, or a team that has one.
- A qualified operator: since Hyatt does not manage its franchised hotels, the owner either operates the hotel or hires a management company with full-service experience.
- A site and market that fit the brand: demand drivers for business, leisure and group travel, and a location Hyatt approves.
- Capital to build and stabilize: equity for the project, reserves for overruns and working capital through ramp-up.
- Design approval: plans that meet brand standards, reviewed through Hyatt’s design process.
The approval process. Owners typically submit a franchise application for a specific site, go through Hyatt’s review of the market, the ownership group and the proposed manager, receive the FDD, and sign the franchise agreement once approved. Construction financing usually closes after the franchise is in place, because lenders want the signed agreement before funding.
Ways to Own a Hyatt
New construction. A ground-up Hyatt requires land, entitlements, construction financing and a long pre-opening runway. Lenders underwrite on the sponsor’s experience, a feasibility study, the budget and the appraisal of the completed hotel. See our hotel start-up financing page.
Buying an existing franchised Hyatt. An operating hotel comes with financial history, which lenders prefer. The buyer must be approved by Hyatt, will usually sign a new franchise agreement, and should expect a PIP tied to the change of ownership. Our hotel acquisition financing page covers these purchases.
Converting an existing hotel. An owner of an independent or differently branded full-service hotel can apply to convert it to a Hyatt flag. The conversion PIP, design approval and the time the hotel is under renovation all shape the loan request.
Owning several hotels. Multi-property owners usually finance each hotel separately, though some refinance a group under a single facility once the properties are stabilized.
Financing Options for a Hyatt Franchise
SBA 7(a) loans. Because Hyatt is on the SBA Franchise Directory, an SBA 7(a) loan can be used for eligible hotel purchases, construction and renovation. The program maximum is currently $5 million, which often limits 7(a) to smaller projects or to one piece of a larger capital stack.
SBA 504 loans. For owner-occupied real estate and long-lived fixed assets, an SBA 504 loan pairs a senior lender with a Certified Development Company. Hotels can qualify when program rules are met, and the structure can be useful for larger land, building and FF&E budgets.
Conventional loans. Many full-service hotel projects are financed with conventional business loans, including construction loans that convert to permanent financing and acquisition loans on stabilized hotels. Terms depend heavily on the sponsor, the market and the hotel’s cash flow.
Equipment and FF&E financing. Guest room packages, kitchen and banquet equipment, laundry equipment, fitness equipment and technology can be financed separately, which can preserve cash for construction or a PIP.
Working capital and lines of credit. Full-service hotels have large payrolls, seasonal swings and group deposits that arrive on different schedules from expenses. Our hotel working capital options can bridge pre-opening costs, renovation periods and slow seasons.
Seller financing on acquisitions. In some hotel sales, the seller agrees to carry part of the price. Any seller note must be acceptable to the senior lender, is typically subordinate to it, and loan programs, including SBA, may limit how it is structured.
SBA Loans for Hyatt Franchisees
SBA lenders use the SBA Franchise Directory to confirm that a brand’s franchise documents have been reviewed for eligibility. A listing does not approve any borrower or project; it clears the franchise relationship so that a lender can evaluate the deal under SBA rules. Our article on SBA loans for hotels covers how the programs apply to lodging.
Hyatt’s directory listing. Hyatt is listed on the SBA Franchise Directory under code S5295, with two notes.
Note 1: the Hyatt Comfort Letter. The SBA has approved the Hyatt Comfort Letter. A comfort letter is a document in which the franchisor gives the lender certain assurances, typically including notice of franchisee defaults and an opportunity to cure them, and a path for the franchise to continue if the lender has to step in. Because the SBA has already approved Hyatt’s form, lenders can use it without a separate review of that document.
Note 2: management agreements. If the applicant also operates under a management agreement with a third party, the lender must review that agreement under SBA rules to determine whether the applicant and the management company are affiliated. The applicant is not eligible if the management company is, or is affiliated with, the franchisor. The SBA has not reviewed any Hyatt management documentation. In plain English, a franchised Hyatt run by an independent management company can be eligible after the lender reviews the agreement, but a hotel managed by Hyatt itself, or by a Hyatt affiliate, is not eligible for SBA financing.
Why this matters for full-service hotels. Many full-service hotels hire a third-party management company. Choose your manager with SBA eligibility in mind before applying for a Hyatt franchise loan, and give the lender the full management agreement early, including fees, term, termination rights and any incentive or key-money provisions.
Application tips.
- Have the signed franchise agreement or Hyatt’s approval, plus the FDD for the brand.
- Provide the management agreement, if any, and the manager’s track record.
- Bring a feasibility study or market study, the construction or PIP budget and an appraisal when available.
- Show the source of your equity and post-closing liquidity.
- Present projections that reflect ramp-up, seasonality and food-and-beverage margins.
How Lenders Evaluate a Hyatt Deal
Personal credit and financial history. Lenders review the principals’ credit, tax returns and personal financial statements, and principals typically provide personal guarantees.
Net worth and liquidity. Full-service hotels require substantial equity and reserves. Lenders want to see liquidity left after closing to cover overruns, slow ramp-up or an unexpected capital need.
Industry and management experience. Experience owning or operating comparable hotels carries great weight, as does the quality of the management company. A first-time owner partnering with an experienced manager can strengthen a request.
Business plan and projections. The plan should break out rooms, food and beverage, meeting and event revenue, and other income, and show department-level expenses. Lenders look closely at group business assumptions, the ramp period for a new hotel and the replacement reserve. Our hotel due diligence checklist covers the documents buyers should gather.
The FDD and franchise agreement. Lenders review the term, successor rights, transfer and termination provisions, liquidated damages, PIP obligations and the comfort letter. Item 10 discloses whether the franchisor offers financing, and Item 19 discloses whether the FDD includes financial performance representations. Our article on how lenders read a Franchise Disclosure Document explains which items matter most.
Real estate. The appraisal, title, environmental report, property condition report and, for a ground lease, the lease term and lender protections are all part of the review.
Historical financials for acquisitions. Expect to provide several years of operating statements, monthly performance reports, tax returns, and the hotel’s recent brand quality results.
Full-Service Hotel FF&E, Food and Beverage, and PIPs
A full-service Hyatt carries more capital equipment and more operating departments than a rooms-focused hotel, and each one affects the loan.
Food and beverage. Restaurants, bars, room service and banquet kitchens require commercial cooking equipment, refrigeration, dish and ventilation systems, plus the licenses and staff to run them. Lenders look at whether these outlets support the hotel’s room rates and group business.
Meeting and event space. Ballrooms and meeting rooms need audio-visual systems, banquet furniture and storage. Group business can be a major revenue source, but it depends on a sales team and local demand.
Guest room FF&E life cycle. Soft goods are replaced more often than case goods, and both wear out within the life of a long loan. A replacement reserve and a realistic renovation schedule belong in every projection.
PIPs on acquisitions and conversions. A buyer of an existing Hyatt, or an owner converting a hotel to the brand, should expect a PIP listing required upgrades. Get the PIP, price it and include it in the acquisition financing rather than treating it as a later problem.
Multi-Unit Growth and Development Agreements
Hotel development usually happens one property at a time, each with its own franchise agreement, financing and approvals. Owners who build relationships with the brand and with lenders on the first hotel often find the second easier, because they bring a track record.
Financing a second hotel. Lenders look at the performance of the first hotel and the sponsor’s overall liquidity, including guarantees already outstanding. Spacing developments so that one hotel stabilizes before the next starts construction reduces the strain on the sponsor.
Portfolio considerations. As the portfolio grows, owners may refinance stabilized hotels to free equity for new projects, or bring in partners. Each step should be checked against franchise transfer provisions and lender covenants.
Real-World Scenarios
A developer building a new full-service hotel. An experienced hotel developer secures a downtown site, obtains Hyatt’s approval and engages a third-party manager. The project is financed with a conventional construction loan that converts to permanent financing, with FF&E financed separately and a working capital line in place for pre-opening hiring and group sales.
A buyer acquiring an operating Hyatt. A hotel investor buys a franchised Hyatt from its developer. The new owner signs a new franchise agreement, receives a change-of-ownership PIP and finances the purchase and PIP together, with a reserve for renovation disruption.
An independent hotel converting to Hyatt. The owner of an independent full-service hotel applies to join the brand. The conversion PIP and design work are financed through a renovation loan, and the lender’s projections reflect the time rooms are out of service.
A smaller project using SBA financing. An owner-operator of a modest full-service property with an independent manager uses an SBA 7(a) loan for part of a renovation, after the lender reviews the management agreement and confirms the manager is not affiliated with Hyatt.
Common Mistakes to Avoid
- Assuming SBA financing will cover a hotel managed by the franchisor or its affiliate
- Choosing a management company before checking SBA affiliation rules
- Budgeting from the application fee instead of the full Item 7 range and project budget
- Underestimating pre-opening costs and the ramp-up of group business
- Leaving the change-of-ownership PIP out of acquisition financing
- Ignoring the replacement reserve and future renovation cycles
- Overlooking liquidated damages and transfer terms in the franchise agreement
For more pitfalls that apply across lodging, read the hotel loan mistakes that cost owners the most.
Next Steps to Finance Your Hyatt Franchise
Step 1: Define the project. Decide whether you are building, buying or converting, and identify the site or hotel.
Step 2: Engage Hyatt and request the FDD. Start the application process for the specific site and obtain the current FDD for the brand.
Step 3: Choose your operator. Decide whether you will self-manage or hire a management company, and check affiliation rules if SBA financing is part of the plan.
Step 4: Build the budget and projections. Combine the Item 7 categories, construction or PIP costs, FF&E, pre-opening and working capital into one budget with a contingency. Use our conventional loan calculator for early payment estimates, which are for planning only and are not an offer or approval.
Step 5: Talk with a financing specialist. Compare SBA, conventional and equipment financing for your project size and structure.
Step 6: Apply and coordinate approvals. Submit the loan request with the franchise documents, management agreement, budget, market study and personal financial information, and align the lender’s timeline with Hyatt’s approval.
Step 7: Close and plan for opening or transition. Fund pre-opening or transition costs, schedule FF&E delivery and renovation work, and keep reserves in place.
Hyatt Franchise Loan FAQs
How much does it cost to open a Hyatt hotel?
The estimated initial investment is in Item 7 of the FDD for the specific brand and hotel type. For a full-service hotel, the total depends heavily on land, construction, room count, food and beverage outlets and meeting space.
What fees does Hyatt charge franchisees?
According to Hyatt’s annual report for 2025, franchisees generally pay an initial application fee and/or a design services fee, plus ongoing royalty fees. Other system charges are disclosed in Item 6 of the FDD.
What royalty does Hyatt charge?
Hyatt reports that royalty fees are typically a percentage of gross rooms revenues, typically ranging from 2.75% to 5%, with some agreements using different structures. Your rate is set out in the FDD and franchise agreement.
How much net worth or liquidity do I need?
Hyatt does not publish a minimum. Hotel lenders will expect substantial equity in the project and meaningful liquidity after closing, and Hyatt reviews the ownership group as part of its approval.
Can I get an SBA loan for a Hyatt hotel?
Hyatt is listed on the SBA Franchise Directory, so SBA financing can be available for eligible borrowers and projects. The SBA has approved the Hyatt Comfort Letter, but a hotel managed by Hyatt or a Hyatt affiliate is not eligible, and any third-party management agreement must be reviewed for affiliation.
What is the SBA 7(a) loan limit for a hotel?
The SBA 7(a) program maximum is currently $5 million, though program rules can change. Larger full-service projects often combine SBA 504 or conventional financing with owner equity.
Can I finance FF&E separately?
Yes. Guest room packages, kitchen and banquet equipment, and technology can be financed or leased separately, as long as the arrangement fits the senior lender’s collateral and lien requirements.
Can I buy an existing Hyatt hotel?
Yes, with Hyatt’s approval. The buyer usually signs a new franchise agreement and receives a PIP, and lenders underwrite the hotel’s actual operating history.
How long is a Hyatt franchise agreement?
Hyatt’s annual report says the standard term is typically 20 years, and franchisees that have complied with their obligations can typically enter a 10-year successor agreement.
Does Hyatt manage franchised hotels?
No. Hyatt says it does not participate in the management of its franchised hotels. Owners either operate the hotel themselves or hire a management company, which must meet brand standards.
Does Hyatt offer financing?
Item 10 of the FDD discloses whether Hyatt or its affiliates offer financing to franchisees. Most owners arrange construction, acquisition and equipment financing with outside lenders.
Does the FDD include financial performance information?
Check Item 19 of the current FDD for the brand to see whether it includes financial performance representations. For an existing hotel, rely on its actual operating statements.
Final Thoughts
Financing a full-service Hyatt is a real estate project, an operating business and a long franchise relationship all at once. Owners who choose an experienced operator, understand the comfort letter and management rules behind SBA eligibility, budget fully for FF&E, pre-opening and future PIPs, and approach lenders with a complete package give their project the best chance of closing on good terms.
US Professional Funding helps franchise owners and hotel investors finance construction, acquisitions, renovations, equipment and working capital. Learn more about our franchise financing and hotel and motel financing solutions.
