Does the definition of 'Brand Damages' for Caption By Hyatt include lost Royalty Fees?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
"Brand Damages" means lost Royalty Fees, lost System Services Charges, lost market penetration and goodwill, loss of Hotel System representation in the Hotel's market area, confusion of national accounts and individual customers, disadvantage in competing for national accounts and other types of bookings for Brand Hotels, lost opportunity costs, and expenses that Hyatt will incur in developing or finding another franchisee to develop another Brand Hotel in the Hotel's market area.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, Brand Damages do include lost Royalty Fees. The document defines "Brand Damages" as encompassing various financial and reputational losses that Hyatt may incur due to a franchisee's actions or termination of the franchise agreement.
Specifically, the definition explicitly states that Brand Damages include "lost Royalty Fees". This means that if a Caption By Hyatt franchise agreement is terminated early, or if the franchisee's actions cause damage to the brand, Hyatt can seek compensation for the Royalty Fees they would have expected to receive over the remaining term of the agreement. This is in addition to other potential damages such as lost System Services Charges, lost market penetration and goodwill, and expenses incurred in finding a replacement franchisee.
This definition is important for prospective Caption By Hyatt franchisees to understand, as it highlights the potential financial consequences of failing to comply with the franchise agreement or causing harm to the brand. Franchisees should carefully consider these potential liabilities when evaluating the franchise opportunity and ensure they have adequate resources to meet their obligations under the agreement.