What defenses does the Guarantor NOT waive under the Caption By Hyatt Guaranty?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) In addition, Guarantor waives any defense arising by reason of any of the following: (i) any disability or any counterclaim or right of set-off or other defense of Franchisee, (ii) any lack of authority of Franchisee with respect to the Franchise Agreement, (iii) the cessation from any cause whatsoever of the liability of Franchisee, (iv) any circumstance whereby the Franchise Agreement shall be void or voidable as against Franchisee or any of Franchisee's creditors, including a trustee in bankruptcy of Franchisee, by reason of any fact or circumstance, (v) any event or circumstance that might otherwise constitute a legal or equitable discharge of the undersigned's obligations hereunder, except that the undersigned do not waive any defense arising from the due performance by Franchisee of the terms and conditions of the Franchise Agreement, (vi) any right or claim of right to cause a marshaling of the assets of Franchisee or any other guarantor, and (vii) any act or omission of Franchisee.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to the 2025 Caption By Hyatt Franchise Disclosure Document, the guarantor does not waive any defense arising from the due performance by the franchisee of the terms and conditions of the Franchise Agreement. This means that if the franchisee fulfills all obligations and adheres to all terms outlined in the agreement with Caption By Hyatt, the guarantor retains the right to use this as a defense against any claims made under the guaranty.
This provision protects the guarantor in situations where the franchisee has met their contractual obligations. For example, if the franchisee has consistently paid all fees on time and maintained the Caption By Hyatt hotel according to brand standards, the guarantor can argue that they should not be held liable for any alleged breaches or debts. This ensures that the guarantor's liability is directly tied to the franchisee's non-performance, rather than being an absolute and unconditional guarantee regardless of the franchisee's actions.
It is important for prospective Caption By Hyatt franchisees and their guarantors to fully understand the scope of the guaranty and the specific defenses that are waived. While the guarantor waives many potential defenses, the retention of the defense related to the franchisee's due performance provides a crucial safeguard. This encourages the franchisee to diligently fulfill their obligations, knowing that doing so will protect both their interests and those of the guarantor.