Can a Caption By Hyatt franchisee enter into a Management Arrangement without Hyatt's approval?

According to Caption By Hyatt's 2025 Franchise Disclosure Document, a franchisee cannot enter into a Management Arrangement without first obtaining written approval from Hyatt. This requirement ensures that the management company meets Hyatt's standards and qualifications. Hyatt will assess whether the management company meets its minimum qualifications, including paying Hyatt's current operator approval fee, and ensures that its personnel attend and satisfactorily complete required brand standard training programs. Hyatt may refuse to approve a management company that is a Competing Brand Owner. If Hyatt approves a management company or the franchisee to manage the hotel as of the effective date, the approved entity will be listed on Exhibit B-1.

As a condition of approval, the management company must sign documents required by Hyatt to protect its intellectual property rights and agree to operate the hotel in compliance with the Franchise Agreement. These documents are referred to as the Management Company Documents, a current version of which is attached as Exhibit F. The management company must also attend and successfully complete Hyatt's designated operator training programs for Brand Hotels, if any.

If an approved management company or the franchisee (if approved to manage the hotel) fails to meet Hyatt's standards or comply with the agreement, Hyatt has the right to revoke its approval. This includes situations where the entity becomes a Competing Brand Owner, fails to complete mandatory training, fails to meet minimum qualifications, or fails to comply with the Franchise Agreement or Management Company Documents. If Hyatt revokes approval, the franchisee must terminate the Management Arrangement and either assume direct control of the hotel's management (if approved by Hyatt) or engage another management company that Hyatt has approved in writing.

This provision is important for prospective Caption By Hyatt franchisees as it highlights the level of control Hyatt maintains over the management and operation of its franchised hotels. Franchisees must ensure that any management company they wish to engage meets Hyatt's requirements and is willing to comply with the terms and conditions set forth in the Franchise Agreement and related documents. Failure to obtain Hyatt's approval or comply with its requirements can result in the revocation of the management company's approval and potential disruption to the hotel's operations.