What is the prohibited action regarding transferees in Non-Control Transfers for a Caption By Hyatt franchise?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
Subject to the other provisions of this ARTICLE XII, Franchisee and/or any of its Owners may consummate any Non-Control Transfers, without seeking
or receiving Hyatt's consent, if (a) neither the proposed transferee nor any of its direct and indirect owners (if the transferee is a legal entity), other than a Public Owner, is a Competing Brand Owner or Sanctioned Person; and (b) such transfer does not, whether in one transaction or a series of related transactions (regardless of the time period over which these transactions take place), result in the transfer or creation of a direct or indirect Controlling Ownership Interest in Franchisee. Within thirty (30) days after the effective date of any Non-Control Transfer (other than transfers among then-existing Owners), Franchisee shall provide Hyatt an updated Exhibit G (if the previously effective version of Exhibit G has changed) or such other information as Hyatt reasonably requests from time to time concerning any new Non-Controlling Owners (other than Limited Interest Owners).
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, a franchisee or its owners cannot consummate Non-Control Transfers if the proposed transferee or any of its direct or indirect owners is a Competing Brand Owner or a Sanctioned Person. This restriction applies unless the transferee is a Public Owner. Additionally, the transfer cannot result in the transfer or creation of a direct or indirect Controlling Ownership Interest in the franchisee, whether it occurs in one transaction or a series of related transactions, regardless of the time period.
In practical terms, this means that if you, as a Caption By Hyatt franchisee, plan to transfer ownership (even a portion that doesn't give the transferee control), you must ensure that the person or entity receiving the interest is not involved with competing hotel brands or is a Sanctioned Person, as defined by Caption By Hyatt. This is to protect the brand's competitive position and maintain standards.
Within thirty days after the effective date of any Non-Control Transfer (excluding transfers among existing owners), the franchisee must provide Caption By Hyatt with an updated Exhibit G (if the previously effective version of Exhibit G has changed) or other information that Caption By Hyatt reasonably requests concerning any new Non-Controlling Owners (excluding Limited Interest Owners). This ensures that Caption By Hyatt is kept informed about the ownership structure of the franchise and can monitor compliance with the transfer restrictions.