Are punitive, exemplary, or treble damages allowed in arbitration against The Standardx?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
The arbitrator has the right to award any relief that the arbitrator deems proper, including money damages (with interest on unpaid amounts from the date due, as well as post-award interest, in accordance with Section 6.5), specific performance, injunctive relief, and attorneys' fees and costs, provided that the arbitrator may not declare any Proprietary Mark generic or otherwise invalid or, except as expressly provided in Section 14.5 below, award any punitive, exemplary, or treble or other forms of multiple damages against either party (Hyatt and Franchisee hereby waiving to the fullest extent permitted by law, except as expressly provided in Section 14.5 below, any right to or claim for any punitive, exemplary, and treble and other forms of multiple damages against the other).
- 14.5 Waiver Of Punitive Damages And Jury Trial. EXCEPT FOR THE INDEMNIFICATION OBLIGATIONS FOR THIRD PARTY CLAIMS UNDER SECTIONS 8.3 AND 8.4, AND EXCEPT FOR PUNITIVE, EXEMPLARY, AND TREBLE AND OTHER FORMS OF MULTIPLE DAMAGES AVAILABLE TO EITHER PARTY UNDER FEDERAL LAW, HYATT AND FRANCHISEE WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO OR CLAIM FOR ANY PUNITIVE, EXEMPLARY, AND TREBLE AND OTHER FORMS OF MULTIPLE DAMAGES AGAINST THE OTHER AND AGREE THAT, IN THE EVENT OF A DISPUTE BETWEEN HYATT AND FRANCHISEE, THE PARTY MAKING A CLAIM WILL BE LIMITED TO EQUITABLE RELIEF AND TO RECOVERY OF ANY ACTUAL DAMAGES (INCLUDING LIQUIDATED DAMAGES) IT SUSTAINS.
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, in most cases, franchisees waive their rights to claim punitive, exemplary, treble, or other forms of multiple damages against The Standardx. The arbitrator in a dispute is generally authorized to award appropriate relief, including monetary damages, specific performance, injunctive relief, and attorney's fees and costs. However, the arbitrator cannot declare any proprietary mark generic or invalid and, with a specific exception, cannot award punitive, exemplary, or treble damages against either party. Both The Standardx and the franchisee waive any right to claim such damages against each other to the fullest extent permitted by law.
An exception to this waiver exists for indemnification obligations related to third-party claims under Sections 8.3 and 8.4 of the agreement. Additionally, the waiver does not apply to punitive, exemplary, treble, or other forms of multiple damages available to either party under federal law. In cases of disputes, the claiming party is limited to equitable relief and recovery of actual damages, including liquidated damages.
This waiver of certain damages could significantly impact a franchisee's potential recovery in a dispute with The Standardx. While actual damages can be pursued, the inability to claim punitive or treble damages may limit the financial compensation a franchisee can receive, even if The Standardx is found to be at fault. Prospective franchisees should carefully consider this limitation and consult with legal counsel to understand its implications fully. Understanding the circumstances under which these damages are waived and the exceptions that apply is crucial for assessing the potential financial risks and rewards of investing in a The Standardx franchise.