What are the obligations of both The Standardx (Hyatt) and the franchisee regarding the period of time in which claims must be brought?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
14.6 Limitations of Claims. EXCEPT FOR CLAIMS ARISING FROM FRANCHISEE'S NON-PAYMENT OR UNDERPAYMENT OF AMOUNTS FRANCHISEE OWES HYATT OR ANY OF ITS AFFILIATES, ANY AND ALL CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR HYATT'S (OR ANY OF ITS AFFILIATES') RELATIONSHIP WITH FRANCHISEE WILL BE BARRED UNLESS A LEGAL PROCEEDING (IN THE REQUIRED OR PERMITTED FORUM) IS COMMENCED WITHIN EIGHTEEN (18) MONTHS FROM THE DATE ON WHICH THE PARTY ASSERTING THE CLAIM KNEW OR SHOULD HAVE KNOWN OF THE FACTS GIVING RISE TO THE CLAIMS.
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, both The Standardx (Hyatt) and the franchisee are subject to a limitation on the time period for bringing claims against each other. Except for claims arising from the franchisee's non-payment or underpayment of amounts owed to The Standardx or its affiliates, any claims arising out of or relating to the franchise agreement or The Standardx's relationship with the franchisee must be initiated within eighteen (18) months. This period begins from the date the party asserting the claim knew or should have known about the facts giving rise to the claim.
This limitation of claims clause means that a franchisee must act promptly if they believe The Standardx has violated the franchise agreement or otherwise harmed their business. Failure to commence a legal proceeding within the 18-month window could result in the claim being barred. This could have significant implications for franchisees who may not immediately recognize the full extent of damages or the basis for a claim.
It is important to note the exception for non-payment or underpayment claims by The Standardx, which are not subject to this 18-month limitation. This means The Standardx could potentially pursue franchisees for unpaid fees or other amounts owed even after the 18-month period has expired for other types of claims. Franchisees should be aware of this asymmetry and ensure they diligently monitor their financial obligations to The Standardx to avoid potential disputes.
Prospective franchisees should carefully consider this limitation of claims provision and consult with legal counsel to understand its implications fully. They should also establish internal procedures for monitoring compliance with the franchise agreement and promptly addressing any potential issues that could give rise to a claim against The Standardx. Understanding this clause is crucial for protecting their legal rights and managing potential risks associated with the franchise agreement.