For a Caption By Hyatt franchise, which owners are required to sign the Guaranty and Assumption of Obligations?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
To simplify the language in this disclosure document, "we," "us" or "our" means Hyatt Franchising, L.L.C., the franchisor. "You" means the entity acquiring a franchise. One or more of the owners of a Controlling Ownership Interest (defined in Item 15) in you who we specify must sign the Guaranty and Assumption of Obligations, which means that all provisions of the Franchise Agreement (Exhibit C) also will apply to those owners. We expect that only entities, and not individuals, will acquire our franchises.
Source: Item 1 — The Franchisor and any Parents, Predecessors, and Affiliates (FDD pages 9–14)
What This Means (2025 FDD)
According to the 2025 Caption By Hyatt Franchise Disclosure Document, the franchisor expects that only entities, and not individuals, will acquire franchises. However, one or more of the owners of a Controlling Ownership Interest in the franchise entity, as specified by Hyatt Franchising, L.L.C., must sign the Guaranty and Assumption of Obligations. This means that the provisions of the Franchise Agreement will also apply to those owners.
In practical terms, this requirement ensures that individuals with significant control over the franchise operation are personally bound by the terms of the Franchise Agreement. This provides Caption By Hyatt with recourse against those individuals should the franchise entity fail to meet its obligations. The definition of "Controlling Ownership Interest" is found in Item 15 of the FDD.
Prospective Caption By Hyatt franchisees should carefully review Item 15 to understand what constitutes a Controlling Ownership Interest and which owners will be required to sign the Guaranty and Assumption of Obligations. This is a crucial aspect of the franchise agreement, as it imposes personal liability on the specified owners for the franchise's performance.