Does Caption By Hyatt require prior written approval for any Management Arrangement?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
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Item 15
OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS
Hotel Management
Either a management company we approve, or you (if we approve you to manage the Hotel), must at all times retain and exercise direct management control over all aspects of the Hotel's business and be the employer of the Hotel's Core Management and other personnel, except for any members of Core Management that are overseen by an F&B Operator whom we approve. You may not enter into any lease, management agreement, or other similar arrangement with any management company for the management or other oversight of all or a part of the Hotel's operation (a "Management Arrangement") without our prior written approval of the management company, and you may not yourself manage the Hotel without our approval of you as the Hotel's operator. We will not unreasonably withhold our approval if the management company or you (as applicable) meets our minimum qualifications and ensures that its or your personnel attend and satisfactorily complete required brand standard training programs. If we approve a management
company, as a condition of that approval, the management company must sign the documents we require to protect our intellectual property rights and reflect its agreement to perform its management responsibilities and operate the Hotel in compliance with the Franchise Agreement. Our current form of Management Company Rider is attached as Exhibit F to the Franchise Agreement.
We may refuse to approve a management company that is a Competing Brand Owner. "Competing Brand Owner" means any entity that (a) is either a franchisor or owner of a Competing Brand (defined below), (b) manages or otherwise operates hotels exclusively for the franchisor or owner of a Competing Brand, or (c) is an affiliate of any entity described in (a) or (b) above. A "Competing Brand" is a hotel concept that has at least 5 hotels operating under that concept's trade name anywhere in the world and that, in our reasonable opinion, competes with Brand Hotels. If the management company or you (if we approve you to manage the Hotel) at any time becomes a Competing Brand Owner, fails to meet our minimum qualifications (as we may periodically modify them) or fails to comply with the Franchise Agreement (including any System Standards and/or if the Hotel remains in any remedial or non-compliant status under our then current Quality Assurance and Compliance Program for 3 or more consecutive months), the Management Company Rider, or any conditions of operator approval that we previously imposed, then we may: (a) revoke our approval of that management company or you as the Hotel's manager; or (b) as a condition of our continued approval, we may impose on that management company or you additional requirements, including participation in remedial training and other operational programs, at the Management Company's or your expense. If we revoke our approval of the Management Company or you as the manager, then you must promptly terminate the Management Arrangement (if applicable) and either assume direct control of the Hotel's management and operation, if we approve you to manage the Hotel, or engage another management company we approve.
Source: Item 15 — Obligation to Participate in the Actual Operation of the Franchise Business (FDD pages 71–74)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, franchisees must obtain prior written approval from Caption By Hyatt before entering into any Management Arrangement. A "Management Arrangement" refers to any lease, management agreement, or similar arrangement with a management company for the management or oversight of the hotel's operations. This requirement extends not only to external management companies but also to the franchisee themselves if they wish to manage the hotel.
Caption By Hyatt states that they will not unreasonably withhold approval if the management company or the franchisee meets their minimum qualifications and ensures that personnel complete the required brand standard training programs. If Caption By Hyatt approves a management company, that company must sign documents to protect Caption By Hyatt's intellectual property rights and agree to operate the hotel in compliance with the Franchise Agreement. The current form of the Management Company Rider is attached as Exhibit F to the Franchise Agreement.
Caption By Hyatt may refuse to approve a management company that is a Competing Brand Owner, which includes entities that franchise, own, manage, or are affiliated with a competing hotel brand with at least 5 hotels operating under that brand's trade name. If an approved management company or the franchisee becomes a Competing Brand Owner, fails to meet minimum qualifications, or fails to comply with the Franchise Agreement, Caption By Hyatt may revoke its approval or impose additional requirements, such as remedial training, at the management company's or franchisee's expense. If approval is revoked, the franchisee must terminate the Management Arrangement and either assume direct control of the hotel's management (if approved) or engage another approved management company.