In the context of the Crowne Plaza agreement, what does 'Applicable Law' encompass?

According to the 2025 Crowne Plaza Franchise Disclosure Document, the definition of 'Applicable Law' varies by state and pertains to specific legal provisions that supersede the standard franchise agreement. For franchisees in California, California Business and Professions Code Sections 20000 through 20043 provide rights to the licensee concerning termination or non-renewal of a license, and if the license contains a provision that is inconsistent with the law, the law will control. Additionally, under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable. In Washington, the Washington Franchise Investment Protection Act may supersede the Franchise Agreement, especially in areas of termination and renewal. RCW 49.62.020 and RCW 49.62.030 address the enforceability of noncompetition covenants based on employee and independent contractor earnings, respectively, while RCW 49.62.060 prohibits restrictions on soliciting or hiring employees of other licensees or the franchisor. For Maryland franchisees, claims arising under the Maryland Franchise Registration and Disclosure Laws must be brought within three years after the grant of the License. In North Dakota, the laws of North Dakota supersede any provisions of the License, or Georgia law, if such provisions are in conflict with such North Dakota laws. In Rhode Island, any provision in the License which designates the governing law as that of any state other than the State of Rhode Island is deleted from Licenses issued in the State of Rhode Island. Finally, in Virginia, The Virginia Code Sections 13.1-557-574-13.1-564 provide: "It shall be unlawful for a franchisor to cancel a franchise without reasonable cause or to use undue influence to induce a franchisee to surrender any right given to it by any provision contained in the franchise."

These state-specific amendments ensure that Crowne Plaza franchisees' rights are protected under local laws, addressing potential conflicts within the standard franchise agreement. This is particularly important in franchising, where a standard agreement might not fully account for the nuances of state laws, which can vary significantly. The amendments cover critical aspects such as termination conditions, non-renewal rights, non-compete clauses, and dispute resolution, providing franchisees with legal safeguards tailored to their operating environment.

Prospective Crowne Plaza franchisees should carefully review the specific amendments applicable to their state to understand their rights and obligations fully. Consulting with a franchise attorney is advisable to navigate these legal nuances and ensure compliance with all applicable laws. These state-specific amendments reflect a commitment to compliance and franchisee protection within the Crowne Plaza franchise system.