Under the Caption By Hyatt franchise agreement, where must the hotel be operated?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
You must operate the Hotel only from a specific site that we first approve. Your rights under the Franchise Agreement are limited to operating the Hotel at the approved site. If all or a substantial portion of the Hotel is condemned or suffers a casualty requiring you to close all or a portion of the Hotel, you may relocate the Hotel to a location we approve.
Unless the Hotel is an operating Brand Hotel, we and you will agree on the boundaries of your "Area of Protection" before signing the Franchise Agreement. We typically define the Area of Protection's boundaries using geographic references (such as streets or rivers) or as a circle with the Hotel at its center. The Area of Protection's size will vary depending on the Hotel's size and location. It could be as small as a few blocks in urban areas and up to about a 3 mile radius from the Hotel's entrance in certain suburban areas. We also will assign an "AOP Term" and list the AOP Term in the Franchise Agreement before we and you sign it. The AOP Term is the time period during which your rights in the Area of Protection will apply. The AOP Term begins on the effective date of the Franchise Agreement and typically ends 3 years after the Hotel's opening date.
Source: Item 12 — Territory (FDD pages 65–67)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, a franchisee must operate the hotel from a specific site that Caption By Hyatt approves. The franchisee's rights under the Franchise Agreement are strictly limited to operating the hotel at this approved location. This means a prospective franchisee cannot choose any location they want but must have it approved by Caption By Hyatt.
If the hotel suffers significant damage or is condemned, requiring closure of all or a substantial portion, the franchisee may relocate the hotel. However, this relocation is also contingent upon Caption By Hyatt's approval of the new site. This ensures that even in unforeseen circumstances, Caption By Hyatt maintains control over the hotel's location and adherence to brand standards.
Before signing the Franchise Agreement, Caption By Hyatt and the franchisee will agree on the boundaries of an "Area of Protection" (AOP), unless the Hotel is an operating Brand Hotel. This area is typically defined using geographic references or a circle centered on the hotel. The size of the AOP varies based on the hotel's size and location, ranging from a few blocks in urban areas to a radius of about 3 miles in suburban areas. An "AOP Term" is also assigned, typically starting on the Franchise Agreement's effective date and ending 3 years after the hotel's opening. These territorial rights are only valid during the AOP Term.