Does the consent to jurisdiction clause in The Standardx franchise agreement require franchisees to commence actions in a specific court, and if so, where?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.3 Consent to Jurisdiction. Subject to the parties' arbitration obligations and the provisions below, Franchisee agrees that all actions arising under this Agreement or otherwise as a result of the relationship between Franchisee and Hyatt (and/or any of its Affiliates) must be commenced in the state or federal court of general jurisdiction closest to Hyatt's then current principal business address, and Franchisee irrevocably submits to the jurisdiction of those courts and waives any objection it might have to either the jurisdiction of or venue in those courts. Nonetheless, Franchisee agrees that Hyatt may enforce this Agreement and any arbitration orders and awards in the courts of the state or states in which Franchisee is domiciled or the Hotel is located.
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, franchisees generally must commence actions in the state or federal court of general jurisdiction closest to The Standardx's principal business address. The franchisee irrevocably submits to the jurisdiction of those courts and waives any objection to the jurisdiction or venue. However, this is subject to the parties' arbitration obligations.
Despite the franchisee's agreement to litigate in the specified jurisdiction, The Standardx retains the right to enforce the Franchise Agreement and any arbitration orders and awards in the courts of the state where the franchisee is domiciled or where the hotel is located. This provides The Standardx with flexibility in pursuing legal action against franchisees.
It's important to note that these jurisdiction clauses may be subject to certain state laws that protect franchisees. For example, the FDD includes riders for Minnesota, North Dakota, Maryland, and Rhode Island that modify the standard consent to jurisdiction clause to comply with those states' franchise laws. These modifications may allow franchisees in those states to bring actions in their home state, notwithstanding the general provision requiring them to sue in Illinois.