Does the Caption By Hyatt franchise agreement allow Hyatt to modify invalid provisions?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
- 18.2 Severability and Interpretation. Except as expressly provided to the contrary in this Agreement (including in Section 14.1), each section, subsection, paragraph, term, and provision of this Agreement is severable, and if, for any reason, any part is held to be invalid or contrary to or in conflict with any applicable present or future law or regulation in a final, unappealable ruling issued by any court, agency, or tribunal with competent jurisdiction, that ruling will not impair the operation of, or otherwise affect, any other portions of this Agreement, which will continue to have full force and effect and bind the parties. If any applicable and binding law or rule of any jurisdiction requires more notice than this Agreement requires of this Agreement's termination or of Hyatt's refusal to offer Franchisee the Successor Franchise Right, or some other action that this Agreement does not require, or if, under any applicable and binding law or rule of any jurisdiction, any provision of this Agreement or any System Standard is invalid, unenforceable, or unlawful, the notice and/or other action required by the law or rule will be substituted for the comparable provisions of this Agreement, and Hyatt may modify the invalid or unenforceable provision or System Standard to the extent required to be valid and enforceable or delete the unlawful provision in its entirety. Franchisee agrees to be bound by any promise or covenant imposing the maximum duty the law permits that is subsumed within any provision of this Agreement, as though it were separately articulated in and made a part of this Agreement.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to the 2025 Caption By Hyatt Franchise Disclosure Document, the franchise agreement contains provisions addressing severability and interpretation. Specifically, if any part of the agreement is deemed invalid due to a final, unappealable ruling by a competent court, agency, or tribunal, the remaining portions of the agreement will remain in full effect. This ensures that as much of the original agreement as possible is upheld, even if specific clauses are invalidated.
Furthermore, if any applicable law or rule requires more notice for termination or refusal of a successor franchise than the agreement stipulates, the legally required notice will supersede the agreement's provisions. Similarly, if any provision of the agreement or any System Standard is deemed invalid, unenforceable, or unlawful under any binding law, Hyatt may modify the invalid or unenforceable provision or System Standard to the extent necessary to make it valid and enforceable. Alternatively, Hyatt can delete the unlawful provision entirely.
This clause also states that the franchisee agrees to be bound by the maximum duty the law permits within any provision of the agreement, as if it were explicitly stated in the agreement. This ensures that the franchisee is held to the highest legal standard possible, even if the agreement's wording is less specific. This section of the franchise agreement is designed to maintain the agreement's enforceability to the greatest extent possible while complying with applicable laws and regulations.