Does the Caption By Hyatt franchisee have any territorial protection outside the Area of Protection?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee's rights in the Area of Protection apply only during the AOP Term. Following the AOP Term, Franchisee will have no territorial rights or protection whatsoever, whether within or outside the Area of Protection, and Hyatt and its Affiliates may open and operate, and authorize
any other parties to open and operate, other Brand Hotels the physical premises of which are located within the Area of Protection, including pursuant to franchise applications submitted and/or franchise agreements and other agreements signed during the AOP Term.
- 1.4 No Other Restrictions. Except for the limited exclusivity provided in Section 1.3, Franchisee's rights under this Agreement are nonexclusive in all respects, the Hotel has no territorial protection whatsoever, and Hyatt and its Affiliates have the right without restriction to engage in any and all activities Hyatt and they desire (including with respect to any and 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 the Hotel. Without limiting the foregoing, Franchisee acknowledges that Hyatt and its Affiliates currently operate other franchised and non-franchised systems for lodging facilities and other accommodations and hospitality affiliations that use different brand names, trademarks, and service marks, including those with the "Hyatt" name as part of their brand name, some of which might operate and have facilities in the Area of Protection during the AOP Term, that will compete directly with Franchisee. Hyatt and its 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 System Services to other Hyatt Network Hotels and other hotels, lodging facilities and other businesses, even if they compete with the Hotel. Franchisee will have no right to pursue any claims, demands, or damages as a result of these activities, whether under breach of contract, unfair competition, implied covenant of good faith and fair dealing, divided loyalty, or other theories.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, the franchisee does not have territorial rights or protection outside of the Area of Protection. After the Area of Protection (AOP) Term, Caption By Hyatt can operate or authorize others to operate hotels, even within the Area of Protection, regardless of franchise applications or agreements signed during the AOP Term.
Caption By Hyatt grants a nonexclusive right to use the Hotel System during the Term to build or convert and operate the Hotel at the Site. The term of the agreement is 20 years after the first day of the Opening Month. The rights under the agreement are nonexclusive in all respects, and the Hotel has no territorial protection whatsoever. Caption By Hyatt has the right to engage in any activities they desire at any time and place, even if those activities compete with the Hotel.
Caption By Hyatt and its affiliates operate other franchised and non-franchised systems for lodging facilities and other accommodations and hospitality affiliations that use different brand names, trademarks, and service marks, some of which might operate and have facilities in the Area of Protection during the AOP Term, that will compete directly with Franchisee. The franchisee has no right to pursue any claims, demands, or damages as a result of these activities, whether under breach of contract, unfair competition, implied covenant of good faith and fair dealing, divided loyalty, or other theories.