Does a Caption By Hyatt franchisee receive an exclusive territory?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
Because we and others may establish and operate one or more Brand Hotels and other Hyatt Network Hotels within the Area of Protection after the AOP Term expires, and during the AOP Term under the exception above, you will not receive an exclusive territory. You may face competition from other franchisees, from outlets we own, or from other channels of distribution or competitive brands that we control.
Except for the limited exclusivity described above, your rights under the Franchise Agreement are nonexclusive in all respects, the Hotel has no territorial protection whatsoever, and we and our affiliates have the right without restriction to engage in all activities we and they desire (including concerning all types of lodging facilities) at any time and place, whether or not using the Proprietary Marks or any aspect of the Hotel System, and whether or not those activities compete with your Hotel. We and our affiliates may use or benefit from, among other things, common computer systems, administrative systems, reservation systems, purchasing systems, and personnel and may provide some or all of the System Services to other Hyatt Network Hotels and other hotels, lodging facilities and other businesses, even if they compete with the Hotel.
Source: Item 12 — Territory (FDD pages 65–67)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, franchisees do not receive an exclusive territory. While Caption By Hyatt does offer an Area of Protection (AOP) for a limited time, this does not constitute an exclusive territory. The AOP is defined geographically, using streets, rivers, or a radius around the hotel, and its size varies based on the hotel's size and location, potentially ranging from a few blocks in urban areas to a 3-mile radius in suburban areas. The AOP Term, which dictates how long the rights to the Area of Protection apply, typically lasts for 3 years from the hotel's opening date.
During the AOP Term, Caption By Hyatt and its affiliates generally will not open or authorize others to open another Brand Hotel within the Area of Protection. However, there is a significant exception: if Caption By Hyatt or an affiliate acquires a group of at least four hotels, they have the right to convert any acquired hotels within the Area of Protection to operate under Caption By Hyatt's Proprietary Marks, even if some of the acquired hotels are not converted to Caption By Hyatt hotels. This exception means that even during the AOP Term, a franchisee could face competition from a converted hotel within their Area of Protection.
After the AOP Term expires, the franchisee loses all territorial rights, and Caption By Hyatt and its affiliates can open or authorize others to open other Brand Hotels within the Area of Protection. The FDD emphasizes that franchisees may face competition from other franchisees, company-owned outlets, or other distribution channels controlled by Caption By Hyatt. The Franchise Agreement explicitly states that the franchisee's rights are nonexclusive, and Caption By Hyatt retains the unrestricted right to engage in any activities, including those that compete with the franchisee's hotel, at any time and place. Therefore, prospective franchisees should be aware that they will not receive an exclusive territory and may face competition from various sources, both during and after the AOP Term.