Under what circumstances, as outlined in The Standardx Franchise Agreement, might the limitation of damages and disclaimers not apply?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
EXCEPT IN FULFILLMENT OF ANY INDEMNIFICATION OBLIGATIONS, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS OR LOSS OF USE DAMAGES) ARISING OUT OF THE SERVICES OR ANY OBLIGATIONS UNDER THIS AGREEMENT, WHETHER SUCH CLAIM IS BASED UPON BREACH OF CONTRACT, BREACH OF WARRANTY, TORT (INCLUDING NEGLIGENCE) OR ANY OTHER LEGAL THEORY, EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR LOSSES. EXCEPT IN FULFILLMENT OF
ANY INDEMNIFICATION OBLIGATIONS, EACH PARTY'S LIABILITY UNDER THIS AGREEMENT WILL BE LIMITED TO AND WILL NOT EXCEED THE SUM WHICH EQUALS THE FEES PAID TO HYATT UNDER THIS AGREEMENT.
Any release as a condition of renewal and/or assignment/transfer will not apply to the extent prohibited by law for claims arising under Minn. Rule 2860.4400D.
Minn. Rule Part 2860.4400J prohibits a franchisee from waiving rights to a jury trial; waiving rights to any procedure, forum or remedies provided by the laws of the jurisdiction; or consenting to liquidated damages, termination penalties or judgment notes. However, we and you will enforce these provisions in our Franchise Agreement to the extent the law allows.
The time limitations set forth in this Section might be modified by the North Dakota Franchise Investment 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 limitation of damages and disclaimers may not apply under specific circumstances, particularly concerning indemnification obligations and legal rights within certain states. The franchise agreement incorporates indemnification obligations, meaning that the limitations of liability do not apply when either party is fulfilling these obligations. This suggests that if The Standardx or the franchisee is required to cover losses or damages incurred by the other party due to specific events or breaches as defined in the franchise agreement, the standard limitations of liability would not be in effect.
Additionally, the FDD notes specific state laws that may override certain limitations. For instance, in Minnesota, any release as a condition of renewal or transfer will not apply to claims arising under Minn. Rule 2860.4400D. Furthermore, Minnesota law prohibits franchisees from waiving their rights to a jury trial or any remedies provided by the laws of the jurisdiction. Similarly, North Dakota law may modify the time limitations for claims and may deem certain liquidated damages provisions as unfair, meaning The Standardx will only enforce these provisions to the extent the law allows.
These exceptions and state-specific regulations are crucial for prospective franchisees to understand. The interplay between the franchise agreement's standard limitations and the legal rights afforded by state laws can significantly impact the financial and legal liabilities of both The Standardx and the franchisee. Franchisees should consult with legal counsel to fully understand how these limitations and exceptions apply to their specific circumstances and location.