Can the Lender or Franchisee assign the Comfort Letter for a Caption By Hyatt franchise?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
tate bankruptcy laws or similar laws with regard to the Hotel; (iii) the acceptance by Lender of a conveyance of the Hotel in lieu of foreclosure; or (iv) Lender taking ownership or possession of the Hotel in any manner; and
- (b) to notify Hyatt in writing of the commencement by another party of foreclosure proceedings or the filing of an action for the appointment of a receiver or petition for relief under state or federal bankruptcy laws, within thirty (30) days after Lender's notice of commencement of such proceedings.
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- Except as set forth in paragraphs 5 and 6 below, this Comfort Letter and the rights hereunder are not assignable by Lender or Franchisee, and neither Lender nor Franchisee has any right or authority to sell, transfer, or assign, or in any manner convey to any third party the Franchise Agreement or any rights under this Comfort Letter, except as provided in the Franchise Agreement. If a third party should become the owner of the Hotel, that third party may apply to
| [LENDER NAME] |
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| , 2025 |
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Hyatt for a new franchise to operate the Hotel, and such application shall be considered in accordance with the same standards by Hyatt with respect to other franchise applications unless otherwise required by law.
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- Lender may assign the Comfort Letter to any subsequent holder or holders of all or any portion of the Loan Documents (the "Assignee") without Hyatt's consent; provided that the Assignee (a) is a commercial bank, investment bank, pension fund, finance company, insurance company, trustee in a securitization or other financial company, or other financial institution or such other type of established organization (so long as such established organization is not a Competing Brand Owner or does not exclusively lend to a Competing Brand Owner) primarily engaged in the business of making or holding loans and any fund or trust managed or serviced by any of the foregoing and (b) does not own, directly or indirectly, any equity interest in Franchisee or its constituent owners;
Source: Item 23 — Receipts (FDD pages 85–349)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, the Comfort Letter has specific stipulations regarding assignment. The lender can assign the Comfort Letter to a subsequent holder of the loan documents without Caption By Hyatt's consent, provided the assignee meets certain criteria. The assignee must be a commercial bank, investment bank, pension fund, finance company, insurance company, trustee in a securitization, or other financial institution primarily engaged in the business of making or holding loans. Additionally, the assignee cannot own any equity interest in the franchisee or its constituent owners.
To complete the assignment, the lender must pay Caption By Hyatt a processing charge of $7,500. Following the sale or transfer of the loan documents, the lender, assignee, and franchisee must execute and deliver an assignment and assumption agreement of the Comfort Letter to Caption By Hyatt. If there are multiple assignees, they must designate one representative to receive notices and negotiate on their behalf, acknowledging that Caption By Hyatt can rely solely on this representative.
Except for the lender's specific right to assign under the conditions outlined above, neither the lender nor the franchisee can assign the Comfort Letter or any rights under it to any third party. If a third party becomes the owner of the hotel, that third party may apply to Caption By Hyatt for a new franchise, which will be considered under the same standards as other franchise applications.