What happens if a part of The Standardx franchise agreement is deemed invalid by a court?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
18.2 Severability and Interpretation. Except as expressly provided to the contrary in this Agreement (including in Section 14.1), each section, subsection, paragraph, term, and provision of this Agreement is severable, and if, for any reason, any part is held to be invalid or contrary to or in conflict with any applicable present or future law or regulation in a final, unappealable ruling issued by any court, agency, or tribunal with competent jurisdiction, that ruling will not impair the operation of, or otherwise affect, any other portions of this Agreement, which will continue to have full force and effect and bind the parties. If any applicable and binding law or rule of any jurisdiction requires more notice than this Agreement requires of this Agreement's termination or of Hyatt's refusal to offer Franchisee the Successor Franchise Right, or some other action that this Agreement does not require, or if, under any applicable and binding law or rule of any jurisdiction, any provision of this Agreement or any System Standard is invalid, unenforceable, or unlawful, the notice and/or other action required by the law or rule will be substituted for the comparable provisions of this Agreement, and Hyatt may modify the invalid or unenforceable provision or System Standard to the extent required to be valid and enforceable or delete the unlawful provision in its entirety. Franchisee agrees to be bound by any promise or covenant imposing the maximum duty the law permits that is subsumed within any provision of this Agreement, as though it were separately articulated in and made a part of this Agreement.
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 franchise agreement contains a severability clause. This means that if a court, agency, or tribunal with competent jurisdiction issues a final, unappealable ruling that any part of the agreement is invalid, contrary to, or in conflict with any applicable present or future law or regulation, the rest of the agreement will remain in full effect and continue to bind both parties.
In practical terms, this clause protects the overall enforceability of the franchise agreement. If a specific provision is found to be unenforceable, The Standardx and the franchisee are still obligated to comply with the remaining terms. This prevents the entire agreement from being nullified due to a single invalid clause.
The FDD also states that if any applicable and binding law requires more notice than the agreement requires for termination or refusal to offer a successor franchise, the law's requirement will take precedence. Additionally, The Standardx may modify any invalid or unenforceable provision or System Standard to the extent required to make it valid and enforceable, or delete the unlawful provision entirely. The franchisee agrees to be bound by the maximum duty the law permits within any provision of the agreement.
This severability and interpretation clause is a standard legal provision in franchise agreements. It aims to maintain the integrity of the contract while ensuring compliance with applicable laws and regulations. Prospective franchisees should understand that while some provisions may be modified or removed to comply with the law, the core obligations and rights outlined in the agreement will generally remain in effect.