Does the Caption By Hyatt Franchise Agreement include an article about the operation of the hotel?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
In consideration of the rights granted to Management Company under the Management Agreement and of Hyatt's consent (under the Franchise Agreement) to Management Company's operation of the Hotel, Management Company hereby acknowledges and ratifies the terms and conditions of the Franchise Agreement and agrees to fully observe and be bound by all terms, conditions and restrictions regarding the management and operation of the Hotel set forth in the Franchise Agreement for as long as Management Company operates the Hotel, as if and as though Management Company had executed the Franchise Agreement as "Franchisee," including, without limitation, all terms and conditions of ARTICLE IV and ARTICLE V of the Franchise Agreement (other than Section 4.2(a)). Management Company further agrees to be bound by the confidentiality and other covenants set forth in Sections 11.5, 11.6, and 11.7 of the Franchise Agreement (including all remedies available to Hyatt under the Franchise Agreement for breach thereof) during and subsequent to its tenure as manager of the Hotel. However, notwithstanding the foregoing, nothing in this Rider constitutes an agreement of Management Company: (a) to pay or assume any financial obligation of Franchisee to Hyatt or to any third party, including any obligation of Franchisee to pay Royalty Fees or System Services Charges or any liquidated damages pursuant to Section 16.5 of the Franchise Agreement; or (b) to be bound by any provision in ARTICLE XII of the Franchise Agreement. Management Company represents and warrants to Hyatt and Franchisee that Management Company is not a Competing Brand Owner, as defined in the Franchise Agreement.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to the 2025 Caption By Hyatt Franchise Disclosure Document, Article IV of the Franchise Agreement contains terms and conditions regarding the management and operation of the hotel. Specifically, the Management Company Rider states that the Management Company agrees to fully observe and be bound by all terms, conditions, and restrictions regarding the management and operation of the Hotel set forth in the Franchise Agreement for as long as the Management Company operates the Hotel, as if the Management Company had executed the Franchise Agreement as "Franchisee," including, without limitation, all terms and conditions of ARTICLE IV and ARTICLE V of the Franchise Agreement (other than Section 4.2(a)).
This means that the Caption By Hyatt franchisee and any management company they employ must adhere to the operational standards outlined in Article IV of the Franchise Agreement. This article likely covers various aspects of hotel management, ensuring consistency and quality across all franchised locations. The management company's agreement to be bound by these terms underscores the importance Caption By Hyatt places on maintaining uniform operational practices.
However, it is important to note that the Management Company is not bound by every aspect of the Franchise Agreement. For example, they are not obligated to pay any financial obligation of Franchisee to Hyatt or to any third party, including any obligation of Franchisee to pay Royalty Fees or System Services Charges or any liquidated damages pursuant to Section 16.5 of the Franchise Agreement; or to be bound by any provision in ARTICLE XII of the Franchise Agreement. Franchisees should carefully review Article IV and related sections to fully understand their obligations and the operational standards expected by Caption By Hyatt.