Does Caption By Hyatt have an option to purchase the franchisee's business?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
ions of the franchise and related agreements. You should read these provisions in the agreements attached to this disclosure document.**
| Provision | Section in franchise or other agreement | Summary |
|---|---|---|
| o. Franchisor’s option | Not applicable | Not applicable. |
| to purchase | ||
| franchisee’s business | ||
| p. Death or disability of franchisee | 12.7 of Franchise Agreement | Upon death or incompetence of owner of a Controlling Ownership Interest in you or your controlling owner, representative must transfer to approved transferee within 6 months. |
| q. Non-competition covenants during the term of the franchise | 4.2, 4.10 and 4.11 of Franchise Agreement | No covenant not to compete, but neither you nor Hotel management company may be a Competing Brand Owner. |
| r. Non-competition | Not applicable | Not applicable |
| covenants after the | ||
| franchise is | ||
| terminated or expires | ||
| s. Modification of the agreement | 18.5 of Franchise Agreement; 15 of Central Services Agreement; 16 of Hosting Services Agreement | Only writing signed by duly-authorized officers may modify agreement, but we may change Hotel System, System Standards, System Services., and services (and related prices) provided under the schedules to the Central Services Agreement. |
| t. Integration/ merger clause | 18.5 of Franchise Agreement; 8(f) of Confidentiality Agreement; 16 of Hosting Services Agreement; 14 of Central Services Agreement | Only terms of Franchise Agreement, Confidentiality Agreement and Central Services Agreement are binding (subject to state law). |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 75–81)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, Caption By Hyatt does not have an option to purchase the franchisee's business. The FDD indicates that under the provision regarding the franchisor's option to purchase the franchisee's business, the section in the franchise agreement is marked as 'Not applicable' and the summary also states 'Not applicable'. This means that Caption By Hyatt does not have a contractual right to buy back a franchise location from the franchisee.
However, Caption By Hyatt does have a right of first refusal to acquire the franchisee's business. Specifically, Caption By Hyatt has the first right to make an offer on transfers of the Hotel or a Controlling Ownership Interest if the franchisee and Caption By Hyatt sign Exhibit C. Caption By Hyatt will only require Exhibit C for certain markets that they determine are strategic.
This distinction is important for potential franchisees. While Caption By Hyatt cannot force a sale of the business back to themselves, they do have the opportunity to preempt other potential buyers if the franchisee decides to sell, but only in certain strategic markets and if Exhibit C is signed. This could potentially limit the franchisee's options when selling the business, as they must first offer it to Caption By Hyatt.