Is Caption By Hyatt obligated to defend or indemnify a franchisee in administrative or judicial proceedings involving Copyrighted Materials?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
You must notify us immediately of any apparent infringement or challenge to your use of any Copyrighted Materials or Confidential Information, or of any person's claim of any rights in any Copyrighted Materials or Confidential Information, 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 or administrative proceeding arising from any infringement, challenge, or claim or otherwise concerning any Copyrighted Materials or Confidential Information. 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 other proceeding or otherwise to protect and maintain our and our affiliates' interests in the Copyrighted Materials and Confidential Information. We will reimburse your reasonable out-of-pocket costs for taking any requested action. We need not participate in your defense nor indemnify you for damages and expenses you incur if you are a party to any administrative or judicial proceeding involving any Copyrighted Materials or if the proceeding is resolved unfavorably to you.
Source: Item 14 — Patents, Copyrights, and Proprietary Information (FDD pages 68–71)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, Caption By Hyatt is not required to participate in a franchisee's defense nor indemnify them for damages and expenses if the franchisee is involved in an administrative or judicial proceeding concerning Copyrighted Materials, especially if the proceeding's outcome is unfavorable to the franchisee. However, if Caption By Hyatt requests the franchisee to take action, Caption By Hyatt will reimburse the franchisee's reasonable out-of-pocket costs for taking the requested action.
The FDD stipulates that franchisees must immediately inform Caption By Hyatt of any potential copyright infringement or challenges related to the Copyrighted Materials. The franchisee is not allowed to communicate with anyone other than Caption By Hyatt, its affiliates, their attorneys, and the franchisee's own attorneys regarding the infringement, challenge, or claim. Caption By Hyatt and its affiliates have the exclusive right to decide on the appropriate action, including taking no action, and to control any litigation or administrative proceedings related to the Copyrighted Materials.
Furthermore, franchisees are obligated to sign documents and take reasonable actions deemed necessary by Caption By Hyatt's attorneys to protect Caption By Hyatt's interests in any litigation or proceeding, or to safeguard their interests in the Copyrighted Materials. This highlights the importance of franchisees adhering to Caption By Hyatt's guidelines and promptly reporting any potential issues related to the Copyrighted Materials to ensure compliance and minimize potential legal complications.