What is the financial threshold for outstanding judgments against a Caption By Hyatt franchisee that would constitute a non-curable default?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
--------------------------------------------------------------------------------------------------------------------------------------| | | h. "Cause" defined – non-curable defaults | 15.2 of Franchise Agreement | Bankruptcy-related events, failing to discharge judgments exceeding $100,000, you stop operating Hotel or identifying Hotel with Proprietary Marks or lose possession, you or affiliate contests ownership of or tries to register our intellectual property, unauthorized transfer, conviction of felony, committing action or other offense likely to reflect adversely on us or the Proprietary Marks, knowingly maintaining false books or submitting false reports, u
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 75–81)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, a franchisee's failure to discharge judgments exceeding $100,000 constitutes a non-curable default under the terms of the Franchise Agreement. This information is detailed in Section 15.2 of the agreement, which defines "cause" for termination without opportunity to cure.
For a prospective Caption By Hyatt franchisee, this means that allowing outstanding judgments to accumulate to a level above $100,000 and failing to resolve them promptly can lead to immediate termination of the franchise agreement. This is a critical threshold to be aware of, as it bypasses the standard process of providing an opportunity to correct the issue.
This provision is more stringent than some franchise agreements, which might allow a period to cure financial defaults. The non-curable nature of this default emphasizes the importance of maintaining sound financial management and promptly addressing any legal judgments to avoid jeopardizing the franchise. Franchisees should ensure they have adequate financial resources and legal support to manage and resolve any potential judgments to remain in compliance with the agreement.