What is Caption By Hyatt prohibited from being implied as in private placement offering materials?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
right to terminate this Agreement upon written notice to Franchisee, provided that Franchisee will not be liable for liquidated damages pursuant to Section 16.5 or Brand Damages in connection with such termination.
12.8 Public Offerings and Disclosures.
(a) Public Offering of Securities. Notwithstanding Sections 12.3 and 12.4, neither Franchisee nor any Controlling Owner may offer any ownership interests or other securities in a public offering for which a registration statement must be filed with the
Securities and Exchange Commission or any similar regulatory agency (whether within or outside the United States) having jurisdiction over the sale of securities.
- (b) Private Placement Offering Materials. With respect to any private placement of ownership interests in Franchisee or any Owner, Franchisee agrees to submit all Offering Materials to Hyatt for its prior approval. No Offering Materials may imply or state (by use of the Proprietary Marks or otherwise) that Hyatt or its Affiliate is participating as an underwriter, issuer, or Franchisee's (or its Owner's) representative, suggest that Hyatt or its Affiliate endorses the offering or agrees with any financial projections,
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, when offering ownership interests through a private placement, franchisees must ensure that their offering materials do not falsely suggest certain relationships or endorsements by Hyatt. Specifically, the materials cannot imply that Hyatt or its affiliates are acting as underwriters, issuers, or representatives for the franchisee or the owner.
Furthermore, the offering materials must not suggest that Caption By Hyatt or its affiliates endorse the offering or agree with any financial projections included in the materials. The document restricts the inclusion of any information about Hyatt, its affiliates, the franchise agreement, Caption By Hyatt's relationship with the franchisee, or the network of Caption By Hyatt hotels, unless Hyatt specifically approves it.
Caption By Hyatt also stipulates that its review and approval of the offering materials does not constitute an endorsement of the offering or a guarantee that the franchisee or its owner is complying with all applicable laws. Prior to issuing consent, Caption By Hyatt may also require changes to the offering materials and seek full indemnification from all participants involved in the offering. Franchisees must pay a non-refundable fee of $5,000 for Hyatt to review the proposed offering materials.