Does the Caption By Hyatt Guaranty include the arbitration requirements outlined in the Caption By Hyatt Franchise Agreement?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
Management Company agrees that Hyatt may enforce directly against Management Company those terms and conditions of the Franchise Agreement to which Management Company has hereby agreed to be bound. Franchisee acknowledges and agrees that any act or omission of Management Company relating directly or indirectly to the Hotel will be deemed and considered the act or omission of Franchisee for purposes of Hyatt's rights and remedies under the Franchise Agreement (including, without limitation, Franchisee's indemnification and defense obligations under Section 8.3 of the Franchise Agreement), any other agreement, or applicable law. ARTICLE
VIII, ARTICLE XIV (including, without limitation, the arbitration provisions) and ARTICLE XVIII of the Franchise Agreement, entitled "Relationship of Parties and Indemnification," "Dispute Resolution," and "General," respectively, are incorporated by reference in this Rider and will govern all aspects of Hyatt's and Management Company's relationship and this Rider as if fully restated within the text of this Rider, with all references to "Franchisee" interpreted as references to Management Company.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to the 2025 Caption By Hyatt Franchise Disclosure Document, the Guaranty includes the arbitration requirements outlined in the Franchise Agreement. Specifically, Article XIV of the Franchise Agreement, which covers dispute resolution, including arbitration provisions, is incorporated by reference into the Guaranty.
This means that the guarantor, who is typically an owner or affiliate of the franchisee, agrees to be bound by the arbitration provisions in the event of a dispute. This ensures that any disputes arising under the Guaranty will be resolved through arbitration, as specified in the Franchise Agreement. The Management Company also agrees that Hyatt may enforce directly against Management Company those terms and conditions of the Franchise Agreement to which Management Company has agreed to be bound, including the arbitration provisions.
For a prospective Caption By Hyatt franchisee, this implies that disputes involving the guarantor will be subject to the same arbitration process as disputes directly between the franchisee and Hyatt. This can provide a streamlined and potentially more cost-effective method of dispute resolution compared to traditional litigation. However, it also means that the guarantor waives the right to a jury trial and agrees to be bound by the arbitrator's decision, which is generally final and binding.