What is a Caption By Hyatt franchisee acknowledging regarding reliance on Hyatt versus its affiliates?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) Franchisee represents, warrants and acknowledges that it is relying solely on Hyatt, and not on any Affiliate of Hyatt, with regard to Hyatt's financial and other obligations under this Agreement, and no employee or other person speaking on behalf of, or otherwise representing, Hyatt has made any statement or promise to the effect that Hyatt's Affiliates guarantee Hyatt's performance or financially back Hyatt.
- 19.3 No Waiver or Disclaimer of Reliance in Certain States. The following provision applies only to franchisees and franchises that are subject to state franchise registration/disclosure laws in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin:
No statement, questionnaire, or acknowledgement signed or agreed to by Franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by Hyatt, any franchise seller, or any other person acting on behalf of Hyatt. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to the 2025 Caption By Hyatt Franchise Disclosure Document, a franchisee acknowledges that they are relying solely on Hyatt, and not on any of Hyatt's affiliates, regarding Hyatt's financial and other obligations under the franchise agreement. This means that the franchisee understands that Hyatt's affiliates do not guarantee Hyatt's performance or financially back Hyatt.
This acknowledgement is significant because it clarifies the financial responsibility within the Caption By Hyatt franchise system. A franchisee cannot seek financial recourse from Hyatt's affiliates if Hyatt fails to meet its obligations. This is a standard practice in franchising, where the franchisor entity is typically responsible for its own obligations.
However, there is an exception for franchisees subject to state franchise registration/disclosure laws in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin. In these states, no acknowledgement signed by the franchisee can disclaim reliance on any statement made by Hyatt or anyone acting on Hyatt's behalf. This provision aims to protect franchisees in these states from unknowingly waiving their rights under state franchise laws.