Under what circumstances is the Rider to the Membership Agreement for a Best Western franchise signed?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
er term of any document executed in connection with the franchise.
IN WITNESS WHEREOF, the parties have executed and delivered this Rider effective on the Effective Date stated in the Membership Agreement.
MEMBER: LICENSOR: [INSERT MEMBER ENTITY], a [INSERT Best Western International, Inc., an Arizona TYPE OF ENTITY] corporation Executed on: Executed on:
RIDER TO THE BEST WESTERN INTERNATIONAL, INC. MEMBERSHIP AGREEMENT FOR USE IN NORTH DAKOTA
This Rider (the "Rider") is made and entered into as of the Effective Date as stated in the Membership Agreement (defined below), by and between Best Western International, Inc., an Arizona nonprofit corporation with its principal business address at 6201 N. 24th Parkway, Phoenix, Arizona 85016 ("we," "us" "our," or "Licensor"), and ___________________________________ ("you," "your," or "Member").
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- Background. Licensor and Member are parties to that certain Membership Agreement that has been signed at the same time as the signing of this Rider (the "Membership Agreement"). This Rider is annexed to and forms a part of the Membership Agreement. This Rider is being signed because (a) Member is a resident of North Dakota and the Property will be located in North Dakota, and/or (b) the offer or sale of the license for the Property that Member will operate under the Membership Agreement was made in the State of North Dakota.
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- Releases. The following language is added as a new Section X of the Membership Agreement:
Any general release shall not apply to the extent prohibited by law with respect to claims arising under the North Dakota Franchise Investment Law.
- Liquidated Damages on Termination. The following language is added to the end of Section F.5 of the Membership Agreement:
The Commissioner has determined termination or liquidated damages to be unfair, unjust and inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law. However, Best Western and Member agree to enforce these provisions to the extent the law allows.
- Governing Law/Consent to Jurisdiction. The following language is added to the end of Section Q of the Membership Agreement:
Notwithstanding the foregoing, to the extent required by the North Dakota Franchise Investment Law, North Dakota law will apply to this Agreement. In addition, to the extent required by applicable law, Member may bring an action in North Dakota.
- No Waiver of Disclaimer of Reliance. No statement, questionnaire or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or any other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
IN WITNESS WHEREOF, the parties have executed and delivered this Rider effective on the Effective Date stated in the Membership Agreement.
MEMBER: LICENSOR: [INSERT MEMBER ENTITY], a [INSERT Best Western International, Inc., an Arizona TYPE OF ENTITY] nonprofit corporation Executed on: Executed on:
RIDER TO THE BEST WESTERN INTERNATIONAL, INC. MEMBERSHIP AGREEMENT FOR USE IN RHODE ISLAND
| (in thousands) | Value | Total | (Level 1) | |
|---|---|---|---|---|
| Mutual funds | $ 75,070 | $ 75,070 | $ 75,070 | |
| Mortgage and asset-backed securities | 74,452 | 74,185 | 74,185 | |
| Corporate bonds | 64,357 | 63,702 | 63,702 | |
| Common shares | 44,630 | 44,630 | 44,630 | |
| U.S. treasury and government agency bonds | 32,649 | 32,538 | 32,538 | |
| Municipal and provincial notes and bonds | 3,622 | 3,594 | 3,594 | |
| Investments in certificates of deposits | 2,253 | 2,234 | 2,234 | |
| Restricted Rabbi Trust investments | 17,037 | 17,037 | 17,037 | |
| Total | $ 314,070 | $ 312,990 | $ 312,990 |
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- Background. Licensor and Member are parties to that certain Membership Agreement that has been signed at the same time as the signing of this Rider (the "Membership Agreement"). This Rider is annexed to and forms a part of the Membership Agreement. This Rider is being signed because (a) Member is a resident of Rhode Island and the Property that Member will operate under the Membership Agreement will be located in Rhode Island; and/or (b) any of the offering or sales activity relating to the Membership Agreement occurred in Rhode Island.
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- Governing Law/Consent to Jurisdiction. The following language is added to the end of Section Q of the Membership Agreement:
Notwithstanding the foregoing, to the extent required by applicable law, Rhode Island law will apply to claims arising under the Rhode Island Franchise Investment Act.
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, a Rider to the Membership Agreement is signed concurrently with the Membership Agreement itself. These Riders are specific to certain states and are triggered by various conditions related to the franchisee's location, residency, or where the franchise offer or sale occurred.
For instance, a Rider for North Dakota is signed if the member is a resident of North Dakota or if the property will be located there, or if the offer or sale of the license was made in North Dakota. Similarly, a Rider for Maryland is required if the member is a resident of Maryland, the property will be operated in Maryland, or the offer to sell or buy the franchise was made or accepted in Maryland. An Illinois Rider is signed if the offer to sell or buy the license was made in Illinois, accepted in Illinois, the member is domiciled in Illinois, or the licensed property will be located in Illinois. A Washington Rider is signed if the property will be located in Washington, the member is a resident of Washington, or any offering or sales activity related to the Membership Agreement occurred in Washington.
These Riders modify the Membership Agreement to comply with specific state franchise laws. They often address issues such as waivers, disclaimers of reliance, governing law, jurisdiction, and limitations of claims, ensuring that Best Western's franchise operations adhere to the legal requirements of each state. The Riders also include acknowledgements and modifications to termination and liquidated damages clauses to align with state regulations.
Prospective Best Western franchisees should pay close attention to whether a Rider applies to their specific situation, as these Riders can significantly impact their rights and obligations under the Membership Agreement. It is crucial to review these Riders carefully with legal counsel to understand their implications fully.