What kind of competition might a Caption By Hyatt franchisee face?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
l. Except for the CRS, you may not use the Internet or any other method to accept reservations for the Hotel.
As described in Item 1, Hyatt Corporation and certain of its affiliates operate and/or grant franchises for various types of hotel, resort, spa, timeshare and other lodging facilities, other accommodations and hospitality affiliations that operate under the Hyatt® name and other trade names. (We disclose the principal business addresses for Hyatt Corporation and some of these affiliates, and these other trade names, in Item 1.) We share offices and/or training locations with Hyatt Corporation and some of its other affiliates. These facilities may solicit and serve customers located near your Hotel's location. You should expect to find, now and in the future, facilities identified with the Hyatt® name and/or these other trade names, and other brands that we and our affiliates operate, franchise, or develop in the future, in your Area of Protection. These facilities will sell goods and services similar to those that you will sell. If conflicts arise between our franchisees and the franchisees and operators of these other facilities, we will analyze them and take the actions (if any) that we deem appropriate. We also may (but need not) develop internal policies for dealing with conflicts.
Item 13
TRADEMARKS
Hyatt Corporation registered the following principal Proprietary Marks on the Principal Register of the United States Patent and Trademark Office (the "PTO"):
| Mark | Registration No. | Registration Date | |------------------|------------------|---------------------| | Hyatt | 945,384 | October 17, 1972 | | World of Hyatt | 5,201,881 | May 9, 2017 | | Caption by Hyatt | 6,901,600 | November 15, 2022 | Hyatt Corporation has made all required renewal and affidavit filings for these registrations.
Hyatt Corporation granted us the rights to use and sublicense the Proprietary Marks under a Trademark License Agreement dated November 1, 1993, as amended (the "Trademark License Agreement"). That agreement has a perpetual term, subject to termination by Hyatt Corporation for cause. Hyatt Corporation may terminate the agreement if it no longer owns a majority interest in us, if we fail to make a required payment and do not cure the failure within 7 days after notice, if we fail to maintain or require our sublicensees to maintain Hyatt Corporation's prescribed standards of quality and service and do not cure the failure within 30 days after notice, if we fail to comply with any other provision of the agreement and do not cure the failure within 30 days after notice, or if we have an insolvency event and do not cure the failure within 60 days after notice. If Hyatt Corporation terminates the Trademark License Agreement because we failed to maintain or failed to require our sublicensees to maintain Hyatt Corporation's standards of quality
and service, Hyatt Corporation may enter into a license with our authorized franchisees, but only if the franchisee not in default of its franchise agreement. No other agreements significantly limit our rights to use or license the Proprietary Marks in a manner material to the franchise.
There are no currently effective material determinations of the PTO, the Trademark Trial and Appeal Board, any state trademark administrator or any court, and no pending infringement, opposition or cancellation proceedings or other material federal or state court litigation, involving the Proprietary Marks. We do not know of any superior prior rights or infringing uses that could materially affect your use of the Proprietary Marks in any state.
You must follow our rules when using the Proprietary Marks. You (and any F&B Operators at the Hotel) may not use the Proprietary Marks with any Hotel restaurant operations without our prior written consent, which we will not unreasonably withhold, and complying with all related System Standards. If we discover your unauthorized use of the Proprietary Marks, we may require you to destroy (with no reimbursement from us) all offending items reflecting that unauthorized use. You must notify us immediately of any apparent infringement or challenge to your use of any Proprietary Mark, or of any person's claim of any rights in any Proprietary Mark, and not communicate with any person other than us, our affiliates, and our and their attorneys, and your attorneys, regarding any infringement, challenge, or claim. We and our affiliates may take the action we and they deem appropriate (including no action) and control exclusively any litigation, PTO proceeding, or other proceeding arising from any infringement, challenge, or claim or otherwise concerning any Proprietary Mark. You must sign any documents and take any other reasonable actions that, in the opinion of our and our affiliates' attorneys, are necessary or advisable to protect and maintain our and our affiliates' interests in any litigation or PTO or other proceeding or otherwise to protect and maintain our and our affiliates' interests in the Proprietary Marks. We will reimburse your reasonable out-of-pocket costs for taking any requested action.
If it becomes advisable at any time for us and/or you to modify, discontinue using, and/or replace any Proprietary Mark and/or to use one or more additional, substitute, or replacement trade or service marks, you must comply with our directions within a reasonable time after receiving notice. Neither we nor our affiliates will reimburse you for any costs or expenses you incur relating to these directions, including your expenses of changing the Hotel's signs, any loss of revenue due to any modified or discontinued Proprietary Mark, or your expenses of promoting a modified or substitute trademark or service mark. Our rights in this paragraph apply to any of the Proprietary Marks (and any portion of any Proprietary Mark) that we authorize you to use.
Source: Item 12 — Territory (FDD pages 65–67)
What This Means (2025 FDD)
According to the 2025 Caption By Hyatt Franchise Disclosure Document, a franchisee may face competition from various sources, both within and outside the Hyatt system. Hyatt Corporation and its affiliates operate and franchise various lodging facilities under the Hyatt name and other trade names. These facilities may solicit and serve customers near a franchisee's hotel location, meaning a Caption By Hyatt franchisee could encounter competition from other Hyatt-branded hotels.
Specifically, after the Area of Protection (AOP) Term expires, Caption By Hyatt and its affiliates can open and operate other Brand Hotels within the Area of Protection, even under franchise agreements signed during the AOP Term. The AOP Term typically ends 3 years after the hotel's opening date. This means that after this initial period, the franchisee will not have exclusive territorial rights and may face direct competition from other Caption By Hyatt locations or other Hyatt brands. The FDD states that franchisees will not receive an exclusive territory and may face competition from other franchisees, outlets Caption By Hyatt owns, or other distribution channels or competitive brands that Caption By Hyatt controls.
Furthermore, Caption By Hyatt and its affiliates have the right to engage in any activities they desire, including those that compete with a franchisee's hotel, regardless of whether they use the Proprietary Marks or the Hotel System. They can also use common systems like computer, administrative, reservation, and purchasing systems to benefit other Hyatt Network Hotels, even if those hotels compete with the Caption By Hyatt franchise. The franchisee has no right to pursue claims or damages resulting from these competitive activities. There are also no restrictions on where Caption By Hyatt or other Brand Hotel operators may solicit customers or accept orders, and Caption By Hyatt may use various distribution channels like the Internet or direct marketing to make sales within the Area of Protection without compensating the franchisee.