Under what conditions will Caption By Hyatt not unreasonably withhold approval of a management company?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
l 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, Caption By Hyatt will not unreasonably withhold approval of a management company if the management company meets Caption By Hyatt's minimum qualifications and ensures that its personnel attend and satisfactorily complete required brand standard training programs. However, as a condition of approval, the management company must sign documents to protect Caption By Hyatt's intellectual property rights and agree to perform its management responsibilities and operate the hotel in compliance with the Franchise Agreement.
Caption By Hyatt may refuse to approve a management company that is a Competing Brand Owner, which is defined as an entity that is a franchisor or owner of a Competing Brand, manages hotels exclusively for a Competing Brand, or is an affiliate of such an entity. A Competing Brand is a hotel concept with at least 5 hotels operating under its trade name that Caption By Hyatt reasonably believes competes with Brand Hotels.
Caption By Hyatt may revoke approval of a management company if it becomes a Competing Brand Owner, fails to meet minimum qualifications, or fails to comply with the Franchise Agreement, System Standards, or the Management Company Rider. Non-compliance includes remaining in a remedial or non-compliant status under Caption By Hyatt's Quality Assurance and Compliance Program for 3 or more consecutive months. If approval is revoked, the franchisee must terminate the Management Arrangement and either assume direct control of the Hotel's management and operation (if approved by Caption By Hyatt) or engage another management company approved by Caption By Hyatt.