What is the length of the Initial Term for the Caption By Hyatt agreement?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement is effective upon the Effective Date, and shall expire twelve (12) months from the Effective Date (the "Initial Term"), unless sooner terminated in accordance with the terms hereof. Thereafter, this Agreement shall automatically renew for successive 12-month renewal periods (each, a "Renewal Term" and, together with the Initial Term, the "Term") unless written notice of termination is provided by either Party to the other Party at least ninety (90) days prior to the expiration of the Initial Term or the then-applicable Renewal Term.
Source: Item 23 — Receipts (FDD pages 85–349)
What This Means (2025 FDD)
According to the 2025 Caption By Hyatt Franchise Disclosure Document, the initial term of the agreement is 12 months from the effective date. After the initial term, the agreement automatically renews for successive 12-month periods, referred to as Renewal Terms. This renewal continues unless either party provides written notice of termination at least 90 days before the end of the current term, whether it's the initial term or a renewal term.
This means a Caption By Hyatt franchisee can expect the initial agreement to last for one year. If neither party acts to terminate the agreement, it will automatically extend for another year, and this cycle will repeat. This provides a degree of stability but also requires the franchisee to be proactive if they wish to end the agreement after the initial year or any subsequent renewal period.
The requirement of a 90-day written notice before the expiration of the initial or any renewal term is a critical point for franchisees. Failing to provide this notice in time will result in an automatic renewal for another year, potentially binding the franchisee to the agreement for an additional term they may not want. Franchisees should mark their calendars and ensure they adhere to this notice period if they plan to terminate the agreement.
Automatic renewal clauses are common in franchise agreements, but the specific terms can vary. Some franchises may have longer initial terms or different notice periods for termination. Prospective Caption By Hyatt franchisees should carefully consider these terms and compare them to industry standards to ensure they align with their business plans and exit strategies.