Does Hyatt have to approve the Franchisee to manage the Caption By Hyatt Hotel?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
not offer to other Brand Hotels and/or other Hyatt Network Hotels; (b) not provide to the Hotel certain System Services that Hyatt provides to other Brand Hotels and/or other Hyatt Network Hotels; and (c) limit the scope of those System Services provided to franchised Brand Hotels, including, by way of example and without limitation, by limiting the access that franchised Brand Hotels have to certain customer and other proprietary information for Hyatt Network Hotels other than the Hotel.
4.2 Management of the Hotel.
- (a) Franchisee or Management Company as Manager. Either a Management Company that Hyatt approves in writing or Franchisee (if Hyatt approves Franchisee to manage the Hotel) must at all times retain and exercise direct management control over all aspects of the Hotel's business and must be the employer of the Hotel's Core Management and other personnel, except for any members of Core Management that are overseen by an F&B Operator whom Hyatt approves. At Hyatt's option, before any of the Hotel's Core Management are engaged, Franchisee must submit to Hyatt the identity and qualifications of the proposed candidates. These personnel must be in place and working on behalf of the Hotel by the time period Hyatt specifies. Franchisee may not enter into a Management Arrangement without Hyatt's prior written approval of the Management Company, and Franchisee may not itself manage the Hotel without Hyatt's approval of Franchisee as the Hotel's operator. Hyatt will not unreasonably withhold its approval if the Management Company or Franchisee (as applicable) meets Hyatt's minimum qualifications, including Hyatt's then current operator approval fee, and ensures that its personnel attend and satisfactorily complete required brand standard training programs.
- (b) Management Company Documents. As a condition of Hyatt's approval of any Management Company, the Management Company must (i) sign the documents Hyatt requires to protect its intellectual property rights and to reflect the Management Company's agreement to perform its management responsibilities and otherwise operate the Hotel in compliance with this Agreement (collectively, the "Management Company Documents"); and (ii) attend and successfully complete Hyatt's designated then current operator training programs for Brand Hotels, if any. The current version of the Management Company Documents is attached as Exhibit F. Hyatt may refuse to approve a Management Company that is a Competing Brand Owner. If Hyatt has approved a Management Company as of the Effective Date, or if Hyatt has approved Franchisee to manage the Hotel as of the Effective Date, then the approved Management Company (if applicable) is listed on Exhibit B-1.
- (c) Revocation of Management Company Approval. If an approved Management Company or Franchisee (if Hyatt approves Franchisee to manage the Hotel)
at any time becomes a Competing Brand Owner, fails to attend and successfully complete mandatory training program(s), fails to meet Hyatt's minimum qualifications (as Hyatt may periodically modify them), or fails to comply with this Agreement (including any System Standards and/or, without limiting the terms of Section 4.8 below, if the Hotel remains in any remedial or non-compliant status under Hyatt's then-current Quality Assurance and Compliance Program for three (3) or more consecutive months), the Management Company Documents, or any conditions of operator approval previously imposed by Hyatt, then, without limiting Hyatt's other rights and remedies under this Agreement and applicable law, Hyatt may (i) revoke its approval of the Management Company (or of Franchisee) as the manager of the Hotel or (ii) as a condition of its continued approval, Hyatt may impose on the Management Company (or Franchisee) additional requirements, including participation in remedial training and other operational programs, at the Management Company's or Franchisee's expense.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, if a franchisee wishes to directly manage the Caption By Hyatt hotel themselves rather than through a management company, they must first obtain written approval from Hyatt. Hyatt will assess whether the franchisee meets their minimum qualifications. These qualifications include paying Hyatt's operator approval fee and ensuring that their personnel attend and satisfactorily complete required brand standard training programs.
If the franchisee chooses to use a management company, that company must also be approved in writing by Hyatt. Hyatt may refuse to approve a management company that is a Competing Brand Owner. As a condition of approval, the management company must sign documents to protect Hyatt's intellectual property rights and agree to operate the hotel in compliance with the franchise agreement. The management company must also attend and successfully complete Hyatt's operator training programs for Brand Hotels.
Hyatt retains the right to revoke its approval of either the franchisee or the management company as manager of the Caption By Hyatt hotel under certain conditions. These conditions include if the franchisee becomes a Competing Brand Owner, fails to attend mandatory training, fails to meet Hyatt's minimum qualifications, or fails to comply with the franchise agreement or management company documents. If Hyatt revokes its 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.