What are the responsibilities of a Caption By Hyatt franchisee regarding F&B and Spa Operations?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
. Franchisee must honor and give first priority on available rooms to all confirmed reservations that the CRS, GDS or ADS refers to the Hotel. The CRS and approved GDS and ADS are the only reservation systems or services that the Hotel may use for reservations. Franchisee will establish the Hotel's room rates, provided that those rates and Franchisee's pricing policies comply with System Standards (to the maximum extent the law allows). Franchisee may not charge any guest a rate higher than the rate that the reservations center specifies to the guest when the guest makes the reservation.
- 4.6 F&B Operations and Spa Operations. Franchisee is responsible for ensuring that all F&B Operations and all Spa Operations (if the Hotel has Spa Operations) operate in full
compliance with all applicable laws, rules and regulations and all applicable System Standards. Franchisee agrees to provide, or cause the Management Company to provide, all training programs to the F&B Operator and Spa Operator (as applicable) that Hyatt periodically specifies. If the F&B Operator or Spa Operator at any time fails to operate in full compliance with all applicable laws, rules and regulations and all applicable System Standards, or fails to comply with any agreement with Hyatt, then, without limiting Hyatt's other rights and remedies under this Agreement and applicable law, Hyatt may revoke its approval of the F&B Operator or Spa Operator (as applicable). If Hyatt does so, then Franchisee must promptly terminate its arrangement with the F&B Operator or Spa Operator and either assume direct control of the Hotel's F&B Operations or Spa Operations (as applicable), if Hyatt has approved Franchisee to manage the Hotel, or engage another approved F&B Operator or Spa Operator that Hyatt has approved in writing.
4.7 Upgrading the Hotel and CapEx Account. Franchisee may not make any material changes to the Hotel's construction, including any changes to any structural or life safety equipment or systems, the number and/or type of guest rooms or common areas, or any architectural features, without Hyatt's prior written consent and complying with such conditions and procedures that Hyatt periodically establishes for such changes. Without limiting Hyatt's rights and Franchisee's obligations under Section 4.3, Hyatt may require Franchisee at any time and from time to time during the Term to upgrade or renovate the Hotel, including by altering the Hotel's appearance and/or replacing a material portion of improvements and/or FF&E, to comply with then current building décor, appearance, trade dress standards and other aspects of the Hotel System that Hyatt has established and then requires for new similarly situated Brand Hotels (subject to Reasonable Deviations). This upgrading or renovation may obligate Franchisee to invest additional capital in the Hotel and/or incur higher operating costs. Franchisee agrees to implement such upgrading and renovation within the time period Hyatt requests, provided that all such upgrades and renovations apply to similarly situated Brand Hotels (subject to Reasonable Deviations).
In order to assist Franchisee in having funds available to make any necessary capital expenditures at the Hotel and comply with its obligations under this Section 4.7 (but without limiting those obligations), each month Franchisee shall deposit into a separate account that Franchisee controls (the "CapEx Account") the amount set forth in Exhibit B-1. Upon Hyatt's reasonable request, Franchisee will periodically provide Hyatt information concerning the funds in and expenditures from the CapEx Account. Franchisee shall use the funds in the CapEx Account only for the purpose of making approved capital expenditures and complying with its upgrade and other obligations under this Section 4.7, although such obligations may require Franchisee to spend more than the amount then in the CapEx Account.
4.8 Inspections/Compliance Assistance and Quality Assurance and Compliance Program. Hyatt may inspect the Hotel at any time, with or without notice to Franchisee, to determine whether Franchisee and the Hotel are complying with the Hotel System, System Standards, and other provisions of this Agreement. Franchisee must give Hyatt's representatives free lodging (subject to availability) during the inspection period.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to the 2025 Caption By Hyatt Franchise Disclosure Document, franchisees have several responsibilities regarding Food and Beverage (F&B) and Spa Operations. The franchisee must ensure that all F&B and Spa Operations comply with all applicable laws, rules, regulations, and System Standards. This includes providing training programs to the F&B Operator and Spa Operator as specified by Hyatt. If an F&B Operator or Spa Operator fails to comply with these standards or any agreement with Hyatt, Hyatt can revoke its approval, and the franchisee must terminate the arrangement with the operator. Following termination, the franchisee must either assume direct control of the operations if approved by Hyatt or engage another approved operator.
At Hyatt's option, the Caption By Hyatt franchisee must prepare and deliver an F&B Operations Plan for Hyatt's approval, detailing the franchisee's proposal for conducting F&B Operations at the hotel. The franchisee must make any modifications reasonably specified by Hyatt and ensure that the hotel operates according to the approved plan. Material changes to the F&B Operations Plan, including changes to restaurant concepts or operators, require Hyatt's prior written approval. Franchisees must also ensure that each F&B Operator signs documents to protect Hyatt's intellectual property rights before the hotel begins operating under the Proprietary Marks. Hyatt may also require approval of any lease or agreement between the franchisee and the F&B Operator.
For Spa Operations, if the hotel has such operations, the Caption By Hyatt franchisee can subcontract the management to a Spa Operator only if Hyatt approves the operator, the spa concept, and the terms of the lease or other arrangement. The Spa Operator must comply with all applicable System Standards and cannot use the Proprietary Marks unless Hyatt provides written authorization. The franchisee is also responsible for ensuring that each F&B Operator and Spa Operator maintains the insurance coverage specified by Hyatt, including naming Hyatt as an additional insured and delivering certificates of insurance to Hyatt. The franchisee is also responsible for hiring the Core Management and other Hotel personnel and determining the terms and conditions of their employment. The franchisee, the Management Company or the approved F&B Operator (as applicable) must hire and properly train all Core Management and have a Core Management team in place at the Hotel at all times.