Does Caption By Hyatt's consent to a transfer guarantee the Hotel's or transferee's success?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
Hyatt's consent to a transfer is not a representation of the fairness of the terms of any contract between Franchisee (or its Owners) and the transferee, a guarantee of the Hotel's or transferee's prospects of success, or a waiver of any claims Hyatt has against Franchisee (or its Owners) or of Hyatt's right to demand the transferee's full compliance with this Agreement or any other agreement with Franchisee or the transferee.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to the 2025 Caption By Hyatt Franchise Disclosure Document, Caption By Hyatt's consent to a transfer of ownership does not guarantee the success of the hotel or the new owner. Caption By Hyatt explicitly states that its consent is not a representation of fairness regarding the terms of any contract between the franchisee and the transferee.
This means that while Caption By Hyatt must approve the transfer based on certain criteria, such as the transferee's financial capabilities and experience, this approval does not serve as an endorsement of the deal's financial viability or the likelihood of the hotel's future profitability under new management. The approval is more about ensuring that the new franchisee meets Caption By Hyatt's standards and is likely to maintain the brand's reputation.
Prospective Caption By Hyatt franchisees should understand that securing franchisor approval for a transfer is only one step in the process. It is crucial for both the seller and the buyer to conduct their own due diligence to assess the financial health of the business and the potential for future success. This includes carefully reviewing the terms of the transfer agreement and seeking professional advice to evaluate the risks and opportunities involved.