When does the AOP Term typically begin for a Caption By Hyatt franchise?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
ty requiring you to close all or a portion of the Hotel, you may relocate the Hotel to a location we approve.
Unless the Hotel is an operating Brand Hotel, we and you will agree on the boundaries of your "Area of Protection" before signing the Franchise Agreement. We typically define the Area of Protection's boundaries using geographic references (such as streets or rivers) or as a circle with the Hotel at its center. The Area of Protection's size will vary depending on the Hotel's size and location. It could be as small as a few blocks in urban areas and up to about a 3 mile radius from the Hotel's entrance in certain suburban areas. We also will assign an "AOP Term" and list the AOP Term in the Franchise Agreement before we and you sign it. The AOP Term is the time period during which your rights in the Area of Protection will apply. The AOP Term begins on the effective date of the Franchise Agreement and typically ends 3 years after the Hotel's opening date.
Subject to the one exception below, neither we nor any of our affiliates will open and operate during the AOP Term, nor authorize any other party to open and operate during the AOP
Term, any other Brand Hotel the physical premises of which are located within the Area of Protection.
Source: Item 12 — Territory (FDD pages 65–67)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, the AOP (Area of Protection) Term typically begins on the effective date of the Franchise Agreement. The AOP Term represents the period during which a franchisee's rights within their designated Area of Protection are applicable. Unless the hotel is already an operating Caption By Hyatt location, Caption By Hyatt and the franchisee will agree on the boundaries of the Area of Protection before the Franchise Agreement is signed.
For prospective franchisees, understanding the AOP Term is crucial because it defines the duration of any territorial protection they receive. The document specifies that the AOP Term typically ends 3 years after the hotel's opening date. This means that the franchisee's exclusive rights within the Area of Protection are limited to this time frame. After the AOP Term expires, Caption By Hyatt and its affiliates have the right to open and operate other Brand Hotels within the Area of Protection, potentially increasing competition for the franchisee.
It's important to note that if the hotel is already operating as a Caption By Hyatt, the franchisee may not receive any Area of Protection or AOP Term. The determination of whether to provide any Area of Protection is based on the time during which the Hotel has operated under the "Caption by Hyatt®" name and the market conditions under which the Hotel operates. This condition highlights the importance of carefully evaluating the terms of the Franchise Agreement, particularly if acquiring an existing Caption By Hyatt location. Franchisees should also be aware that even during the AOP Term, there are exceptions that could allow Caption By Hyatt to operate other hotels within the Area of Protection under certain circumstances, such as acquiring a group of hotels.