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There is not a model category on simplicial smooth manifolds which gives the data you're looking for, but there is a structure of category of fibrant objects such that nerves of groupoids are fibrant. The fibrations are Kan maps (a la Henriques, but with the additional requirement that the maps on vertices be submersions), and the weak equivalences are maps which induce isomorphisms on all simplicial homotopy groups (again, as Henriques defines them). Nerves of groupoids are fibrant in this sense, hypercovers are trivial fibrations, and morphisms qua principal bibundles are equivalent to morphisms via spans where the source leg is a hypercover.

This category of fibrant objects structure doesn't extend to a model structure on simplicial manifolds because there aren't any positive dimensional cofibrant objects (e.g. hypercovers are trivial fibrations, but given any positive dimensional manifold, you can build a hypercover on it which doesn't admit a section).

If you still want to work in a model category capturing this, the natural thing is to use Yoneda and pass to the local model structure on simplicial presheaves. A theorem of Dugger, Hollander and Isaksen (Thm. 10.3 of math.AT/0205027v2) effectively says You can show that this is a fully faithful embedding on the level of homotopy categories.

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There is not a model category on simplicial smooth manifolds which gives the data you're looking for, but there is a structure of category of fibrant objects such that nerves of groupoids are fibrant. The fibrations are Kan maps (a la Henriques, but with the additional requirement that the maps on vertices be submersions), and the weak equivalences are maps which induce isomorphisms on all simplicial homotopy groups (again, as Henriques defines them). Nerves of groupoids are fibrant in this sense, hypercovers are trivial fibrations, and morphisms qua principal bibundles are equivalent to morphisms via spans where the source leg is a hypercover.

This category of fibrant objects structure doesn't extend to a model structure on simplicial manifolds because there aren't any positive dimensional cofibrant objects (e.g. hypercovers are trivial fibrations, but given any positive dimensional manifold, you can build a hypercover on it which doesn't admit a section).

If you still want to work in a model category capturing this, the natural thing is to use Yoneda and pass to the local model structure on simplicial presheaves. A theorem of Dugger, Hollander and Isaksen (Thm. 10.3 of math.AT/0205027v2) effectively says that this is a fully faithful embedding on the level of homotopy categories.