Will arbitration be conducted on an individual or class-wide basis for The Standardx franchise disputes?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Hyatt and Franchisee agree that arbitration will be conducted on an individual, not a class-wide, basis; that only Hyatt and Franchisee (and/or their respective Related Parties, as applicable) may be the parties to any arbitration proceedings described in this Section 14.1; and that an arbitration proceeding between Hyatt and Franchisee (and/or their respective Related Parties) may not be consolidated with any other arbitration proceeding between Hyatt and any other person or entity. Notwithstanding the foregoing or anything to the contrary in this Section 14.1 or Section 18.2, if any court or arbitrator determines that all or any part of the preceding sentence is unenforceable with respect to a dispute that otherwise would be subject to arbitration under this Section 14.1, then all parties agree that this arbitration clause shall not apply to that dispute and that such dispute shall be resolved in a judicial proceeding in accordance with this ARTICLE XIV (excluding this Section 14.1).
Despite this Section 14.1, Hyatt and Franchisee each have the right to seek temporary restraining orders and temporary or preliminary injunctive relief from a court of competent jurisdiction; provided, however, that Hyatt and Franchisee must contemporaneously submit the dispute for arbitration on the merits as provided in this Section 14.1. The provisions of this Section 14.1 are intended to benefit and bind certain third party non-signatories and will continue in full force and effect subsequent to and notwithstanding this Agreement's expiration or termination.
Source: Item 18 — OTHER INCOME (LOSS), NET (FDD pages 187–399)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, arbitration between Hyatt (referred to as The Standardx in the document) and the franchisee will be conducted on an individual basis, not a class-wide basis. This means that any disputes will be handled separately between The Standardx and each individual franchisee. Only The Standardx and the franchisee (and/or their respective related parties) can be parties to any arbitration proceedings.
Furthermore, the arbitration proceeding between The Standardx and a franchisee cannot be consolidated with any other arbitration proceeding between The Standardx and any other person or entity. This reinforces the individual nature of the arbitration process. However, if a court or arbitrator determines that the clause preventing class-wide arbitration is unenforceable, then the agreement to arbitrate will not apply to that specific dispute, and it will be resolved in a judicial proceeding.
Despite the arbitration agreement, both The Standardx and the franchisee retain the right to seek temporary restraining orders and temporary or preliminary injunctive relief from a court of competent jurisdiction. However, they must also submit the dispute for arbitration on the merits simultaneously. This ensures that while urgent legal actions can be pursued in court, the underlying dispute will still be subject to arbitration. The provisions regarding arbitration are intended to benefit and bind certain third-party non-signatories and will remain in effect even after the franchise agreement expires or terminates.