If a provision of The Standardx agreement is unlawful, what actions can Hyatt take?
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, if any applicable law or rule deems a provision of the agreement or any System Standard invalid, unenforceable, or unlawful, Hyatt may take certain actions. Specifically, the notice or other action required by the law or rule will be substituted for the comparable provisions of the agreement. Additionally, Hyatt may modify the invalid or unenforceable provision or System Standard to the extent required to be valid and enforceable, or even delete the unlawful provision entirely.
This clause ensures that the franchise agreement remains compliant with applicable laws and regulations. It protects both The Standardx and the franchisee by allowing for necessary adjustments to the agreement without invalidating the entire contract. This adaptability is crucial in maintaining a legally sound and operational franchise system.
Furthermore, the franchisee agrees to be bound by any promise or covenant imposing the maximum duty the law permits that is subsumed within any provision of the agreement. This means that even if a specific provision is deemed unenforceable, the franchisee is still obligated to fulfill the maximum duty allowed by law within that provision. This clause aims to uphold the original intent of the agreement as much as legally possible, providing additional protection for The Standardx.
In practical terms, this means that a prospective The Standardx franchisee should be aware that the terms of the franchise agreement can be modified to comply with local laws. While this provides a degree of legal security, it also introduces the possibility that certain aspects of the agreement could change, potentially affecting the franchisee's rights and obligations. It is advisable for potential franchisees to seek legal counsel to fully understand the implications of this clause and how it might affect their specific circumstances.