Does Caption By Hyatt have the right to modify the minimum qualifications for a management company periodically?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
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, Caption By Hyatt retains the right to modify the minimum qualifications for a management company periodically. If a management company or the franchisee (if approved to manage the hotel) fails to meet Caption By Hyatt's minimum qualifications, as they may be periodically modified, Caption By Hyatt has the right to revoke its approval of that management company or the franchisee as the hotel's manager. As a condition of continued approval, Caption By Hyatt may impose additional requirements, including participation in remedial training and other operational programs, at the management company's or the franchisee's expense.
This means that prospective Caption By Hyatt franchisees need to be aware that the criteria for an approved management company are not fixed and may change over time. If the management company fails to meet the updated criteria, Caption By Hyatt can revoke its approval. This could force the franchisee to either assume direct control of the hotel's management and operation (if approved by Caption By Hyatt) or engage another management company that Caption By Hyatt approves.
It is important for franchisees to carefully review the Management Company Rider (Exhibit F to the Franchise Agreement) and any conditions of operator approval. Franchisees should also stay informed of any changes to the minimum qualifications for management companies to ensure their chosen management company remains in compliance. This flexibility afforded to Caption By Hyatt allows them to adapt their brand standards and operational requirements as market conditions and industry best practices evolve, but it also places the onus on the franchisee to ensure ongoing compliance.