How is the damages cap for The Standardx calculated, specifically regarding the fees and charges considered?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
EXCEPT AS SET FORTH IN THE FRANCHISE AGREEMENT, IN NO EVENT SHALL ANY PARTY BE LIABLE IN RESPECT OF ANY EVENT OR SERIES OF CONNECTED EVENTS FOR ANY DAMAGES UNDER THIS AGREEMENT OR IN CONNECTION WITH THE RELATIONSHIP OF THE PARTIES HEREUNDER IN EXCESS OF AN AMOUNT EQUAL TO THE SUM OF ALL FEES AND CHARGES DUE HEREUNDER, WHETHER OR NOT PAID BY OWNER FOR THE 12 MONTHS PERIOD PRIOR TO THE RELEVANT EVENT OR SERIES OF EVENTS.
WITHOUT LIMITING HYATT'S EXPRESS OBLIGATIONS HEREUNDER, HYATT SHALL NOT BE RESPONSIBLE FOR AND DISCLAIMS ANY LIABILITY ASSOCIATED WITH A THIRD PARTY'S FAILURE TO PROCESS CREDIT CARD TRANSACTIONS ON BEHALF OF OWNER.
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, the damages cap is calculated based on the fees and charges paid by the franchisee. Specifically, the document states that in no event shall any party be liable for damages exceeding the sum of all fees and charges due under the agreement for the 12-month period prior to the event that caused the damages, regardless of whether those fees were actually paid.
This means that a The Standardx franchisee's potential liability for damages is limited to the amount of fees and charges they would have paid to the franchisor over the year preceding the event leading to the damages. This cap includes all fees and charges due under the agreement, providing a clear financial boundary for potential liabilities. This can be beneficial for franchisees as it provides a predictable limit to their financial exposure in case of disputes or other issues.
However, it's important to note the phrase "EXCEPT AS SET FORTH IN THE FRANCHISE AGREEMENT" which appears twice in the quoted text. This indicates that there may be situations described elsewhere in the franchise agreement where this damages cap does not apply. A prospective franchisee should carefully review the entire franchise agreement to identify any such exceptions and understand the circumstances under which they might be liable for damages exceeding this cap. Understanding these exceptions is crucial for assessing the overall financial risk associated with the The Standardx franchise.