What constitutes a breach of the Caption By Hyatt franchise agreement regarding transfers?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
Accordingly, unless otherwise specified in this ARTICLE XII, neither this Agreement (or any interest in this Agreement), the Hotel or substantially all of its assets, nor any ownership interest in Franchisee or any Owner (if such Owner is a legal entity) may be transferred (as defined in Exhibit A) without complying with the terms and conditions applicable to such transfer in this ARTICLE XII.
A transfer of the Hotel's ownership, possession, or control, or substantially all of its assets, may be made only with a transfer of this Agreement.
Any transfer without complying with the terms and conditions applicable to such transfer in this ARTICLE XII, including Hyatt's approval (where such approval is required under this Agreement), is a breach of this Agreement.
- 12.3 Non-Control Transfers.
Subject to the other provisions of this ARTICLE XII, Franchisee and/or any of its Owners may consummate any Non-Control Transfers, without seeking
or receiving Hyatt's consent, if (a) neither the proposed transferee nor any of its direct and indirect owners (if the transferee is a legal entity), other than a Public Owner, is a Competing Brand Owner or Sanctioned Person; and (b) such transfer does not, whether in one transaction or a series of related transactions (regardless of the time period over which these transactions take place), result in the transfer or creation of a direct or indirect Controlling Ownership Interest in Franchisee. Within thirty (30) days after the effective date of any Non-Control Transfer (other than transfers among then-existing Owners), Franchisee shall provide Hyatt an updated Exhibit G (if the previously effective version of Exhibit G has changed) or such other information as Hyatt reasonably requests from time to time concerning any new Non-Controlling Owners (other than Limited Interest Owners).
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to the 2025 Caption By Hyatt Franchise Disclosure Document, a franchisee breaches the franchise agreement by transferring the agreement, the hotel, its assets, or any ownership interest without adhering to the transfer conditions outlined in Article XII of the agreement. This includes failing to obtain Hyatt's approval when required.
Specifically, any transfer of the Hotel's ownership, possession, or control, or substantially all of its assets, must be accompanied by a transfer of the franchise agreement itself. The agreement specifies that unless otherwise stated in Article XII, neither the agreement itself, the Hotel, its assets, nor any ownership interest in the franchisee or any owner can be transferred without complying with the terms applicable to such a transfer.
However, the Caption By Hyatt agreement does allow for some exceptions. Franchisees and/or their owners can execute Non-Control Transfers without needing Hyatt's consent if the transferee isn't a Competing Brand Owner or Sanctioned Person, and the transfer doesn't result in a Controlling Ownership Interest change. Following any Non-Control Transfer (excluding those among existing owners), the franchisee must provide Hyatt with an updated Exhibit G or any other information Hyatt requests regarding new Non-Controlling Owners within 30 days.