What is the exception to the general release regarding liability for The Standardx franchisees, as stated in the Rider?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
---------------------------------------------------------------------------|-----------------------------------------------------------------------------------| | and between, a ("Franchisee") and the | | | franchisor entity set forth in Exhibit C ("Hyatt"). | | | | | | 1. | Background. Hyatt and Franchisee are parties to that certain Franchise Agreement | | dated, 2025 that has been signed concurrently with the signing of | | | this Rider. This Rider is annexed to and forms part of the Franchise Agreement. This Rider is | | | being signed because (a) Franchisee is a resident of Maryland, or (b) the Brand Hotel will be | | | located or operated in Maryland. | | | 2. | Releases. The following language is added to the end of Sections 10, 12.4(e) and | | 13.3 of the Franchise Agreement: | | | ; provided, however, that such general release shall not apply to any liability under | | | the Maryland Franchise Registration and Disclosure Law. | | | 3. | Dispute Resolution. The following sentence is added to the end of the first | | paragraph of Section 14.1: | | | Franchisee may, subject to any arbitration obligations, bring an action in Maryland | | | for claims arising under the Maryland Franchise Registration and Disclosure Law | | | to the extent required by the Maryland Franchise Registration and Disclosure Law, | | | unless preempted by the Federal Arbitration Act. | | | 4. | Governing Law.
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 Rider specifies an exception to the general release regarding liability for franchisees. This exception pertains to any liability arising under the Maryland Franchise Registration and Disclosure Law. This means that while franchisees may sign a general release as part of the franchise agreement, this release does not waive The Standardx's liability under Maryland's franchise laws. This protection applies if the franchisee is a resident of Maryland or if the Brand Hotel will be located or operated in Maryland.
In practical terms, this provision ensures that The Standardx franchisees in Maryland retain their rights and protections under Maryland franchise law, regardless of any general release they may have signed. This is particularly important because state franchise laws often provide specific remedies and protections to franchisees, such as the right to sue for misrepresentation or unfair practices. The Rider clarifies that The Standardx cannot use a general release to shield itself from liability for violations of these laws.
This type of state-specific rider is common in franchise agreements, especially for franchises operating in states with strong franchise laws. It aims to balance the franchisor's need for a general release with the franchisee's statutory rights. Prospective franchisees should carefully review any state-specific riders to understand how they modify the general terms of the franchise agreement and what protections they offer under local laws. Franchisees should consult with an attorney to fully understand their rights and obligations under the franchise agreement and applicable state laws.
Therefore, The Standardx franchisees should be aware that the general release they sign does not waive any claims they may have against the franchisor under the Maryland Franchise Registration and Disclosure Law. This ensures that franchisees in Maryland have recourse if The Standardx violates state franchise laws, providing an additional layer of protection for their investment and business operations.