The_Standardx 2025 Franchise FAQ - FDD Ninja

Question 1

What is the geographic scope of the territorial protection offered to The Standardx franchisees?

Accepted Answer

Illinois, at your Hotel, or at another operating Hyatt hotel. We offer optional brand standards training programs on an ongoing basis.

## **Item 12**

## **TERRITORY**

You must operate the Hotel only from a specific site that we first approve. Your rights under the Franchise Agreement are limited to operating the Hotel at the approved site. If all or a substantial portion of the Hotel is condemned or suffers a casualty requiring you to close all or a portion of the Hotel, you may relocate the Hotel to a location we approve.

Unless the Hotel is an operating Brand Hotel, we and you will agree on the boundaries of your "Area of Protection" before signing the Franchise Agreement. We typically define the Area of Protection's boundaries using geographic references (such as streets or rivers) or as a circle with the Hotel at its center. The Area of Protection's size will vary depending on the Hotel's size and location. It could be as small as a few blocks in densely-populated urban areas and up to about a 1- or 2-mile radius from the Hotel's entrance in less populated areas. We also will assign an "AOP Term" and list the AOP Term in the Franchise Agreement before we and you sign it. The AOP Term is the time period during which your rights in the Area of Protection will apply. The AOP Term begins on the effective date of the Franchise Agreement and typically ends from 1 to 5 years after the Hotel's opening date.

Subject to the one exception below, neither we nor any of our affiliates will open and operate during the AOP Term, nor authorize any other party to open and operate during the AOP Term, any other Brand Hotel the physical premises of which are located within the Area of Protection. One exception to this restriction is that, during the AOP Term, if we or any affiliate acquires ownership of or the right to operate, manage, franchise or license (regardless of the form of transaction) another group of at least 4 hotels, one or more of which hotels are located or are under contract or construction to be located in the Area of Protection, then we and our affiliates will have the unrestricted right to convert, or cause to be converted, the acquired hotel(s) within the Area of Protection from its (or their) original trade identity to operate under the Proprietary Marks and the Hotel System. We then may operate, or authorize any other party to operate, those hotel(s) as Brand Hotel(s), even if one or more of the other acquired hotels, whether operating within or outside the Area of Protection, are not converted to Brand Hotels.

If the Hotel is an operating Brand Hotel, you may not receive any Area of Protection or AOP Term when signing the Franchise Agreement. We will make the determination of whether to provide any Area of Protection based on the time during which the Hotel has operated under the "Hyatt" or "The StandardX" name and the market conditions under which the Hotel operates.

Your rights in the Area of Protection apply only during the AOP Term. Following the AOP Term, you will have no territorial rights or protection, whether within or outside the Area of Protection, and we and our affiliates may open and operate, and authorize any other parties to open and operate, other Brand Hotels the physical premises of which are located within the Area of Protection, including under franchise applications submitted and/or franchise agreements and other agreements signed during the AOP Term. Because we and others may establish and operate one or more Brand Hotels and other Hyatt Network Hotels within the Area of Protection after the AOP Term expires, and during the AOP Term under the exception above, you will not receive an exclusive territory. You may face competition from other franchisees, from outlets we own, or from other channels of distribution or competitive brands that we control.

Except for the limited exclusivity described above, your rights under the Franchise Agreement are nonexclusive in all respects, the Hotel has no territorial protection whatsoever, and we and our affiliates have the right without restriction to engage in all activities we and they desire (including concerning all types of lodging facilities) at any time and place, whether or not using the Proprietary Marks or any aspect of the Hotel System, and whether or not those activities compete with your Hotel. We and our affiliates may use or benefit from, among other things, common computer systems, administrative systems, reservation systems, purchasing systems, and

personnel and may provide some or all of the System Services to other Hyatt Network Hotels and other hotels, lodging facilities and other businesses, even if they compete with the Hotel. You will have no right to pursue any claims, demands, or damages as a result of these activities, whether under breach of contract, unfair competition, implied covenant of good faith and fair dealing, divided loyalty, or other theories.

You have no options, rights of first refusal or similar rights to acquire additional franchises. Continuation of your territorial rights does not depend on your achieving a certain sales volume, market penetration or other contingency. We may not alter your Area of Protection or territorial rights during the AOP Term.

There are no restrictions on where you or other Brand Hotel operators (including us and our affiliates) may solicit customers or accept orders. We and our affiliates may use other channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing, to make sales in the Area of Protection under the Proprietary Marks and other trademarks without compensating you. You may use other channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing, to advertise and market the Hotel outside of the Area of Protection with our approval. Except for the CRS, you may not use the Internet or any other method to accept reservations for the Hotel.

Source: Item 12 — Territory (FDD pages 64–66)

Question 2

How many claims did The Standardx bring against franchisees during the 2024 fiscal year that are required to be disclosed in Item 3?

Accepted Answer

During the 2024 fiscal year, we brought a claim against franchisees as follows:

*Hyatt Franchising, L.L.C. v. Imperial Hotels, LLC, Sunikumar Patel, Akash Maheshwari, Roshni Jariwala Desai, Madhvan Nair, Daksha Patel, Sanjay Desai, Raj Gandhi, Usha Patel, Vinod Jayrambhai Patel and Mina Jariwala*, No. 01-24-0008-8964 (AAA 2024) (Unpaid Royalty Fees).

Other than as described above, no litigation is required to be disclosed in this Item.

Source: Item 3 — Litigation (FDD page 16)

Question 3

What is the reported total debt for The Standardx?

Accepted Answer

| Total maturities of debt (1) | $ 3,805 |
|---|---|
| (1) Excludes $4 million of finance lease obligations and $27 million of unamortized discounts and deferred financing fees. |  |

| 2025                         | $ 454   |
|------------------------------|-------------|
| 2026                         | 405         |
| 2027                         | 605         |
| 2028                         | 405         |
| 2029                         | 651         |
| Thereafter                   | 1,285       |
| Total maturities of debt (1) | $ 3,805 |

**Variable Rate Term Loan**—During the year ended December 31, 2024, we entered into a credit agreement with Bank of America to correspond with the total amount of the secured financing receivable we issued to the buyer in conjunction with the sale of Park Hyatt Zurich (see Note 7) for a CHF 41 million (approximately $45 million outstanding at December 31, 2024) variable rate term loan, which matures in 2029.

**Floating Average Rate Loan**—During the year ended December 31, 2012, we obtained a secured construction loan with Banco Nacional de Desenvolvimento Econômico e Social - BNDES ("BNDES") in order to develop Grand Hyatt Rio de Janeiro. The loan was split into four separate sub-loans. Sub-loans (a) and (b) mature in 2031 and bear interest at the Brazilian Long Term Interest Rate - TJLP plus 2.02%, and when the TJLP rate exceeds 6%, the amount corresponding to the TJLP portion above 6% is required to be capitalized daily. Sub-loans (c) and (d) matured during the year ended December 31, 2023. At December 31, 2024, the weighted-average interest rates for the sub-loans we have drawn upon is 8.02%. At December 31, 2024 and December 31, 2023, we had Brazilian Real ("BRL") 119 million, or $19 million, and BRL 136 million, or $28 million, outstanding, respectively.

Source: Item 10 — OTHER ASSETS (FDD pages 132–156)

Question 4

For The Standardx, what revenue recognized during the three months ended March 31, 2025 was included in the contract liabilities balance at the beginning of the year, and what did this revenue primarily relate to?

Accepted Answer

Revenue recognized during the three months ended March 31, 2025 and March 31, 2024 included in the contract liabilities balance at the beginning of each year was \$661 million and \$623 million, respectively. This revenue primarily relates to distribution and destination management services and the loyalty program.

Source: Item 1 — Financial Statements. (FDD pages 156–187)

Question 5

What is the total accumulated amortization for The Standardx's intangible assets?

Accepted Answer

(1) Finance lease assets are net of $18 million and $14 million of accumulated amortization at December 31, 2024 and December 31, 2023, respectively.

Weighted-average remaining lease terms and discount rates were as follows:

| Management and hotel services agreement and | 19 | $ 1,368 $ (290) $ 1,078 |
| Customer relationships intangibles | 10 | 410 (153) 257 |
|---|---|---| 
| Other intangibles | 10 | 35 (9) 26 |
| Total $ 2,619 $ (452) $ 2,167 |  |  |

Source: Item 23 — Receipts (FDD pages 85–132)

Question 6

What was the total accumulated amortization for all listed intangibles for The Standardx?

Accepted Answer

olidation.

The following table provides a reconciliation of segment Adjusted EBITDA to income before income taxes:

|                                                                                            | Year Ended December 31, |         |    |             |         |  |  |  |  |
|--------------------------------------------------------------------------------------------|-------------------------|---------|----|-------------|---------|--|--|--|--|
|  |  | 2024 |  | 2023 | 2022 |  |  |  |  |
| Segment Adjusted EBITDA | \$ | 1,255 | \$ | 1,231 \$ | 1,105 |  |  |  |  |
| Unallocated overhead expenses |  | (160) |  | (177) | (170) |  |  |  |  |
| Eliminations |  | 1 |  | 1 | 1 |  |  |  |  |
| Contra revenue |  | (69) |  | (47) | (31) |  |  |  |  |
| Revenues for reimbursed costs |  | 3,352 |  | 3,058 | 2,620 |  |  |  |  |
| Stock-based compensation expense (Note 17) (1) |  | (62) |  | (75) | (60) |  |  |  |  |
| Transaction and integration costs |  | (42) |  | (42) | (35) |  |  |  |  |
| Depreciation and amortization |  | (333) |  | (397) | (426) |  |  |  |  |
| Reimbursed costs |  | (3,457) |  | (3,144) | (2,632) |  |  |  |  |
| Equity earnings (losses) from unconsolidated hospitality ventures |  | 31 |  | (1) | 5 |  |  |  |  |
| Interest expense |  | (180) |  | (145) | (150) |  |  |  |  |
| Gains (losses) on sales of real estate and other |  | 1,245 |  | 18 | 263 |  |  |  |  |
| Asset impairments |  | (213) |  | (30) | (38) |  |  |  |  |
| Other income (loss), net |  | 257 |  | 124 | (34) |  |  |  |  |
| Pro rata share of unconsolidated owned and leased hospitality |  | (62) |  | (64) | (55) |  |  |  |  |
|

Source: Item 10 — OTHER ASSETS (FDD pages 132–156)

Question 7

What was the total amount of goodwill impairment losses recognized by The Standardx during the year ended December 31, 2022?

Accepted Answer

December 31, 2022, we recognized goodwill impairment charges of \$15 million, \$0 million, and \$7 million, respectively, related to the sales of certain hotels. These goodwill impairment charges were recognized in asset impairments on our consolidated statements of income within our owned and leased segment (see Note 7). During the year ended December 31, 2024, as a result of our annual impairment analyses (see Note 2), we determined that the carrying values of two of our reporting units were in excess of the fair values, and we recognized \$148 million of goodwill impairment charges in asset impairments on our consolidated statements of income within our management and franchising and distribution segments. We estimated the fair values of the goodwill allocated to the reporting units, which are classified as Level Three in the fair value hierarchy, using a weighted methodology considering the output from both a discounted future cash flow model and the guideline public companies method. The assumptions and judgments included projected future cash flows, discount rate, and capitalization rate. For the reporting unit within our management and franchising segment, changes in projected business performance expectations or specific valuation factors outside of our control, such as the discount rate, may significantly impact the estimated fair value of the reporting unit. A 5% decline in the underlying cash flows or a 1% increase in the discount rate or capitalization rate would result in a material impairment charge. ⁽²⁾ At December 31, 2024, we have not completed the assignment of goodwill attributed to the Bahia Principe Transaction to reporting units (see Note 7). Source: Item 23 — Receipts (FDD pages 85–132)

Question 8

What was the total amount of goodwill impairment losses recognized by The Standardx during the year ended December 31, 2024?

Accepted Answer

| | Management and franchising | Owned and leased | Distribution (1) | Overhead | Unallocated (2) | Total | |---------------------------------------------|-------------------------------|---------------------|------------------|----------|-----------------|-------------| | Balance at January 1, 2023 | | | | | | | | Goodwill | \$ 1,465 | \$ 210 | \$ 1,589 | \$ 2 | \$ — | \$ 3,266 | | Accumulated impairment losses | (4) | (161) | — | — | — | (165) | | Goodwill, net | \$ 1,461 | \$ 49 | \$ 1,589 | \$ 2 | \$ — | \$ 3,101 | | Activity during the year | | | | | | | | Additions | 62 | — | 39 | — | — | 101 | | Foreign currency translation | 3 | — | — | — | — | 3 | | adjustments | | | | | | | | Balance at December 31, 2023 | | | | | | | | Goodwill | 1,530 | 210 | 1,628 | 2 | — | 3,370 | | Accumulated impairment losses | (4) | (161) | — | — | — | (165) | | Goodwill, net | \$ 1,526 | \$ 49 | \$ 1,628 | \$ 2 | \$ — | \$ 3,205 | | Activity during the year | | | | | | | | Additions | 86 | — | — | — | 336 | 422 | | Disposals | — | — | (914) | — | — | (914) | | Impairment losses | (110) | (15) | (38) | — | — | (163) | | Measurement period adjustments | — | — | (1) | — | — | (1) | | (Note 7) | | | | | | | | Foreign currency translation | (7) | — | — | — | (1) | (8) | | adjustments | | | | | | | | Balance at December 31, 2024 | | | | | | | | Goodwill | 1,609 | 210 | 713 | 2 | 335 | 2,869 | | Accumulated impairment losses | (114) | (176) | (38) | — | — | (328) | | Goodwill, net | \$ 1,495 | \$ 34 | \$ 675 | \$ 2 | \$ 335 | \$ 2,541 | | | | | | | | | ⁽¹⁾ At December 31, 2023, one of our Source: Item 23 — Receipts (FDD pages 85–132)

Question 9

What is the total estimated initial investment range (excluding real estate costs) for The Standardx?

Accepted Answer

| Type of expenditure | Amount | Method of Payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Application Fee (1) | $95,000 to $145,000 | Lump sum | Upon signing franchise application | Us |
| Comfort letter fee(s) | $0 to $2,500 | Lump sum | When your lender(s) sign a comfort letter with us | Us |
| Alternative Design | $0 to $30,000 | As agreed | As incurred | Us |
| Review Fee |  |  |  |  |
| Extension of opening deadline | $0 to $10,000 | As agreed | When you request extension of Hotel opening deadline | Us |
| IT Project Management Services fee and expense reimbursement | $64,995 to $69,630 | As agreed | Before the Hotel opens | Us |
| Signage | $65,000 to $100,000 | As agreed | As incurred | Suppliers |
| Telecommunications systems, security system and Technology System equipment and fees (2) | $638,600 to $777,650 | As agreed | As incurred | Suppliers and Hyatt Corporation |
| Column 1 Type of expenditure | Column 2 Amount | Column 3 Method of Payment | Column 4 When due | Column 5 To whom payment is to be made |
| Architecture and design | $537,500 to $1,950,000 | As agreed | As incurred | Architects, engineers, designers and other professionals |
| Construction, improvements, remodeling, decorating costs and other sitework | $21,875,000 to $67,500,000 | As agreed | As incurred | General contractor, suppliers and us or our affiliate |
| Furniture, fixtures, other fixed assets and equipment (3) | $3,375,000 to $12,000,000 | As agreed | As incurred | Suppliers |
| Operating supplies & | $625,000 to | As agreed | As incurred | Suppliers |
| equipment (4) | $2,700,000 |  |  |  |
| Fire and life safety | $15,000 to | As agreed | As incurred | Suppliers |
| consultation | $30,000 |  |  |  |
| General and administrative buildout costs (5) | $320,000 to $500,000 | As agreed | As incurred | Third parties |
| Revenue management fees (6) | $0 to $17,500 | As agreed | Monthly, if you participate in the revenue management program | Us |
| Field marketing program fees (6) | $0 to $24,723 | As agreed | Monthly, if you participate in the field marketing program | Us |
| Pre-opening marketing and sales expenses (7) | $62,500 to $300,000 | As agreed | Before opening | Us and third parties |
| Liquor license (8) | $30,000 to $400,000 | As agreed | As incurred | Government agency or previous license holder |
| PIP fee | $0 to $10,000 | As agreed | For our preparation of the PIP if you are converting an existing structure to a Brand Hotel | Us |
| Column 1 Type of expenditure | Column 2 Amount | Column 3 Method of Payment | Column 4 When due | Column 5 To whom payment is to be made |
| Training expenses (fees and reimbursements payable to us) | $18,775 to $41,705 | As agreed | As incurred | Us |
| Training expenses (your and your personnel’s costs to attend) | $20,085 to $27,810 | As agreed | As incurred | Suppliers |
| Additional optional | $0 to $250,000 | As agreed | As incurred | Us |
| training |  |  |  |  |
| Miscellaneous pre- opening costs (9) | $276,000 to $375,000 | As agreed | As incurred | Suppliers, employees, us and Hyatt Corporation |
| Additional funds - 3 months (10) | $360,000 to $675,000 | As agreed | As incurred | Suppliers, employees, us and Hyatt Corporation |
| TOTAL ESTIMATED INITIAL INVESTMENT (excluding real estate costs) (11) | $28,378,455 to $87,936,518 |  |  |  |

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 36–40)

Question 10

What was the total gross value of all listed intangibles for The Standardx?

Accepted Answer

[Item 10: OTHER ASSETS]

| Management and hotel services agreement and franchise agreement intangibles | 19 | $ 1,368 $ (290) $ 1,078 |
|---|---|---||
| Brand and other indefinite-lived intangibles — 806 — 806 |  |  |
| Customer relationships intangibles | 10 | 410 (153) 257 |
| Other intangibles | 10 | 35 (9) 26 |
| Total $ 2,619 $ (452) $ 2,167 |  |  |

---

[Item 10: OTHER ASSETS]

| Management and hotel services agreement and franchise agreement intangibles | $ 906 $ (248) $ 658 |
|---|---||
| Brand and other indefinite-lived intangibles 608 — 608 |  |
| Customer relationships intangibles | 620 (243) 377 |
| Other intangibles 33 (6) 27 |  |
| Total $ 2,167 $ (497) $ 1,670 |  |

Source: Item 10 — OTHER ASSETS (FDD pages 132–156)

Question 11

What is the total net value of all listed intangibles for The Standardx?

Accepted Answer

note, lease or obligation.

#### **10. OTHER ASSETS**

| Management and hotel services agreement and franchise agreement intangibles | 19 | $ 1,368 $ (290) $ 1,078 |
|---|---|---|
| Brand and other indefinite-lived intangibles — 806 — 806 |  |  |
| Customer relationships intangibles | 10 | 410 (153) 257 |
| Other intangibles | 10 | 35 (9) 26 |
| Total $ 2,619 $ (452) $ 2,167 |  |  |
#### **11. DEBT**

| Management and hotel services agreement and franchise agreement intangibles | $ 906 $ (248) $ 658 |
|---|---|
| Brand and other indefinite-lived intangibles 608 — 608 |  |
| Customer relationships intangibles | 620 (243) 377 |
| Other intangibles 33 (6) 27 |  |
| Total $ 2,167 $ (497) $ 1,670

Source: Item 10 — OTHER ASSETS (FDD pages 132–156)

Question 12

What was the total purchase consideration for The Standardx's acquisition of Bahia Principe?

Accepted Answer

| Cash paid, net of cash acquired        | \$ 372 |
|----------------------------------------|-----------|
| Cash acquired                          | 2         |
| Fair value of deferred consideration   | 58        |
| Fair value of contingent consideration | 33        |
| Total purchase consideration           | \$ 465 |

Source: Item 1 — Financial Statements. (FDD pages 156–187)

Question 13

What is the total value of The Standardx's 5.750% senior notes that are due in 2030 and 2032?

Accepted Answer

Fair Value—We estimated the fair value of debt, which consists of the senior unsecured notes below (collectively, the "Senior Notes") and other long-term debt, excluding finance leases.

- \$400 million of 4.850% senior notes due 2026
- \$600 million of 5.750% senior notes due 2027
- \$400 million of 4.375% senior notes due 2028
- \$500 million of 5.050% senior notes due 2028
- \$600 million of 5.250% senior notes due 2029
- \$450 million of 5.750% senior notes due 2030
- \$450 million of 5.375% senior notes due 2031
- \$500 million of 5.750% senior notes due 2032
- \$350 million of 5.500% senior notes due 2034

Source: Item 1 — Financial Statements. (FDD pages 156–187)

Question 14

What amount of total unrecognized tax benefits did The Standardx record at March 31, 2025, and December 31, 2024?

Accepted Answer

At March 31, 2025 and December 31, 2024, total unrecognized tax benefits recorded in other long-term liabilities on our condensed consolidated balance sheets were \$388 million and \$366 million, respectively, of which \$143 million and \$137 million, respectively, would impact the effective tax rate, if recognized. While it is reasonably possible that the amount of uncertain tax benefits associated with the U.S. treatment of the loyalty program could significantly change within the next 12 months, at this time, we are not able to estimate the range by which the reasonably possible outcomes of the pending litigation could impact our uncertain benefits within the next 12 months.

Through a prior acquisition, we assumed an assessment of additional corporate income tax from the Mexican tax authorities, which was in the process of being appealed, primarily related to disallowed deductions taken on historical tax returns. Our request for appeal to a higher court for one of the tax years was denied on May 15, 2024, and the assessment was finalized. At both March 31, 2025 and December 31, 2024, we had an \$18 million tax liability recorded in other long-term liabilities on our condensed consolidated balance sheets in connection with this matter. Our filing position for the additional tax years and matters assessed is more likely than not to be sustained. As the tax benefit that is more than 50% likely of being realized upon settlement is zero, we had a \$13 million uncertain tax liability recorded in other long-term liabilities on our condensed consolidated balance sheets at both March 31, 2025 and December 31, 2024.

Source: Item 1 — Financial Statements. (FDD pages 156–187)

Question 15

What amount of the unrecognized tax benefits recorded by The Standardx at March 31, 2025, and December 31, 2024, would impact the effective tax rate if recognized?

Accepted Answer

At March 31, 2025 and December 31, 2024, total unrecognized tax benefits recorded in other long-term liabilities on our condensed consolidated balance sheets were \$388 million and \$366 million, respectively, of which \$143 million and \$137 million, respectively, would impact the effective tax rate, if recognized. While it is reasonably possible that the amount of uncertain tax benefits associated with the U.S. treatment of the loyalty program could significantly change within the next 12 months, at this time, we are not able to estimate the range by which the reasonably possible outcomes of the pending litigation could impact our uncertain benefits within the next 12 months.

Through a prior acquisition, we assumed an assessment of additional corporate income tax from the Mexican tax authorities, which was in the process of being appealed, primarily related to disallowed deductions taken on historical tax returns. Our request for appeal to a higher court for one of the tax years was denied on May 15, 2024, and the assessment was finalized. At both March 31, 2025 and December 31, 2024, we had an \$18 million tax liability recorded in other long-term liabilities on our condensed consolidated balance sheets in connection with this matter. Our filing position for the additional tax years and matters assessed is more likely than not to be sustained. As the tax benefit that is more than 50% likely of being realized upon settlement is zero, we had a \$13 million uncertain tax liability recorded in other long-term liabilities on our condensed consolidated balance sheets at both March 31, 2025 and December 31, 2024.

Further, the Mexican tax authorities disallowed credits taken on historical tax returns and applied value added taxes to certain transactions. In accordance with Accounting Standards Codification 450, Contingencies, we have not recorded a liability associated with the additional value added tax as we do not believe a loss is probable. At March 31, 2025, our maximum exposure is not expected to exceed \$12 million.

Source: Item 1 — Financial Statements. (FDD pages 156–187)

Question 16

How does The Standardx's Application Fee in Item 5 relate to the Comfort letter fee(s) in Item 7?

Accepted Answer

| Type of expenditure | Amount | Method of Payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Application Fee (1) | $95,000 to $145,000 | Lump sum | Upon signing franchise application | Us |
| Comfort letter fee(s) | $0 to $2,500 | Lump sum | When your lender(s) sign a comfort letter with us | Us |

Question 17

How does the Application Fee in Item 5 relate to the ongoing fees described in Item 6 for The Standardx?

Accepted Answer

| Type of expenditure | Amount | Method of Payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Application Fee (1) | $95,000 to $145,000 | Lump sum | Upon signing franchise application | Us |

We describe the Application Fee and the conditions for its refund in Item 5.

We group the ongoing fees that you will pay to us and other companies in the Hyatt Group when operating the Hotel into 3 categories. The first category includes the fees that the Franchise Agreement specifies. Except as described below, these fees are typically imposed and collected by and payable to us. The second category includes the fees for those System Services that we typically classify as Mandatory Services for Brand Hotels. The third category includes the fees for those System Services that we typically classify as Non-Mandatory Services for Brand Hotels.

| Column 1 | Column 2 |
|---|---|
| Type of Fee | Amount |
| Global Property Guest Services (GPGS) Add-On Program | Will vary depending on services selected. Currently, $3.50 to $16 per service interaction requested, but could increase if costs increase |
| Digital Ancillary Services Program | Currently, $1,250 per month plus commission payable to our vendor of 5% of net revenue actually received from bookings through the vendor's channels, but could increase if costs increase |

Question 18

How does the Application Fee in Item 5 relate to the territory granted in Item 12 for The Standardx?

Accepted Answer

| Type of expenditure | Amount | Method of Payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Application Fee (1) | $95,000 to $145,000 | Lump sum | Upon signing franchise application | Us |

Subject to the one exception below, neither we nor any of our affiliates will open and operate during the AOP Term, nor authorize any other party to open and operate during the AOP Term, any other Brand Hotel the physical premises of which are located within the Area of Protection. One exception to this restriction is that, during the AOP Term, if we or any affiliate acquires ownership of or the right to operate, manage, franchise or license (regardless of the form of transaction) another group of at least 4 hotels, one or more of which hotels are located or are under contract or construction to be located in the Area of Protection, then we and our affiliates will have the unrestricted right to convert, or cause to be converted, the acquired hotel(s) within the Area of Protection from its (or their) original trade identity to operate under the Proprietary Marks and the Hotel System. We then may operate, or authorize any other party to operate, those hotel(s) as Brand Hotel(s), even if one or more of the other acquired hotels, whether operating within or outside the Area of Protection, are not converted to Brand Hotels.

If the Hotel is an operating Brand Hotel, you may not receive any Area of Protection or AOP Term when signing the Franchise Agreement. We will make the determination of whether to provide any Area of Protection based on the time during which the Hotel has operated under the "Hyatt" or "The StandardX" name and the market conditions under which the Hotel operates.

Your rights in the Area of Protection apply only during the AOP Term. Following the AOP Term, you will have no territorial rights or protection, whether within or outside the Area of Protection, and we and our affiliates may open and operate, and authorize any other parties to open and operate, other Brand Hotels the physical premises of which are located within the Area of Protection, including under franchise applications submitted and/or franchise agreements and other agreements signed during the AOP Term. Because we and others may establish and operate one or more Brand Hotels and other Hyatt Network Hotels within the Area of Protection after the AOP Term expires, and during the AOP Term under the exception above, you will not receive an exclusive territory. You may face competition from other franchisees, from outlets we own, or from other channels of distribution or competitive brands that we control.

Question 19

How does the Application Fee refund policy in Item 5 relate to the assistance The Standardx provides as outlined in Item 11?

Accepted Answer

Explanatory Notes

- 1. Application Fee. The Application Fee listed above is for a Brand Hotel with 125 to 300 guest rooms. We describe the Application Fee and the conditions for its refund in Item 5.

Question 20

How does the Application Fee refund policy in Item 5 relate to the financial statements provided in Item 1 for The Standardx?

Accepted Answer

he date of this Application or later supplemented to this Application,) are or will be true, complete and current. Franchisor shall not be deemed to have knowledge of any facts not contained in this Application or in the attached documents.

Included with this Application is the application fee in the amount specified in the FDD or letter of intent. Applicant hereby expressly acknowledges that acceptance and deposit of the application fee by Franchisor does not, in any respect, bind or obligate Franchisor to enter into a Franchise Agreement granting Applicant a franchise. This Application is neither an offer of a franchise by Franchisor nor a contract for the acquisition of a franchise or any other rights to operate a Hyatt-affiliated Hotel. Applicant further acknowledges that the research, investigation, review and approval process and similar administrative functions of Franchisor constitute the sole and only consideration for the application fee submitted herewith. If Applicant withdraws this Application before Franchisor approves it, or if Franchisor does not approve this Application for any reason, Franchisor will refund Applicant's application fee less a \$5,000 fee

Question 21

How does the Application Fee refund policy in Item 5 relate to the franchisee's obligations regarding site selection as described in Item 9 for The Standardx?

Accepted Answer

ent. Franchisor shall not be deemed to have knowledge of any facts not contained in this Application or in the attached documents.

Included with this Application is the application fee in the amount specified in the FDD or letter of intent. Applicant hereby expressly acknowledges that acceptance and deposit of the application fee by Franchisor does not, in any respect, bind or obligate Franchisor to enter into a Franchise Agreement granting Applicant a franchise. This Application is neither an offer of a franchise by Franchisor nor a contract for the acquisition of a franchise or any other rights to operate a Hyatt-affiliated Hotel. Applicant further acknowledges that the research, investigation, review and approval process and similar administrative functions of Franchisor constitute the sole and only consideration for the application fee submitted herewith. If Applicant withdraws this Application before Franchisor approves it, or if Franchisor does not approve this Application for any reason, Franchisor will refund Applicant's application fee less a \$5,000 fee

Question 22

How does the Application Fee refund policy in Item 5 relate to the payment schedule for the estimated initial investment in Item 7?

Accepted Answer

[Item 7: ESTIMATED INITIAL INVESTMENT]

| Type of expenditure | Amount | Method of Payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Application Fee (1) | $95,000 to $145,000 | Lump sum | Upon signing franchise application | Us |

[Item 7: ESTIMATED INITIAL INVESTMENT]

- 1. Application Fee. The Application Fee listed above is for a Brand Hotel with 125 to 300 guest rooms. We describe the Application Fee and the conditions for its refund in Item 5.

[Item 7: ESTIMATED INITIAL INVESTMENT]

Except for a portion of the Application Fee that we will refund if we do not approve the application, no amounts in the chart are refundable.

[Item 5: INITIAL FEES]

Refundability and Range of Initial Fees

Except as we describe above concerning the Application Fee and Extension Fee, none of these payments are refundable under any circumstances.

Question 23

How does the Application Fee refund policy in Item 5 relate to the potential for litigation against franchisees as described in Item 3 for The Standardx?

Accepted Answer

he date of this Application or later supplemented to this Application,) are or will be true, complete and current. Franchisor shall not be deemed to have knowledge of any facts not contained in this Application or in the attached documents.

Included with this Application is the application fee in the amount specified in the FDD or letter of intent. Applicant hereby expressly acknowledges that acceptance and deposit of the application fee by Franchisor does not, in any respect, bind or obligate Franchisor to enter into a Franchise Agreement granting Applicant a franchise. This Application is neither an offer of a franchise by Franchisor nor a contract for the acquisition of a franchise or any other rights to operate a Hyatt-affiliated Hotel. Applicant further acknowledges that the research, investigation, review and approval process and similar administrative functions of Franchisor constitute the sole and only consideration for the application fee submitted herewith. If Applicant withdraws this Application before Franchisor approves it, or if Franchisor does not approve this Application for any reason, Franchisor will refund Applicant's application fee less a \$5,000 fee

Question 24

Besides the Franchise Agreement, which other agreements related to The Standardx specify that Illinois law applies, excluding the Federal Arbitration Act and other federal law?

Accepted Answer

| Provision | Section in franchise or other agreement | Summary | 
|---|---|---| 
| w. Choice of law | 14.2 of Franchise Agreement; 8C of Confidentiality Agreement; 11 of Central Services Agreement | Except for Federal Arbitration Act and other federal law, and subject to state law, Illinois law applies. |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 81–85)

Question 25

What brands, besides The Standardx, are included under the definition of 'properties' or 'property portfolio' operated, managed, franchised, owned, leased, developed, or licensed by Hyatt?

Accepted Answer

- "properties," "portfolio of properties," or "property portfolio" refer to our hotel portfolio and residential and vacation units that we operate, manage, franchise, own, lease, develop, license, or to which we provide services or license our trademarks, including under the Park Hyatt, Alila, Miraval, Impression by Secrets, The Unbound Collection by Hyatt, Andaz, Thompson Hotels, The Standard, Dream Hotels, The StandardX, Breathless Resorts & Spas, JdV by Hyatt, Bunkhouse Hotels, Me and All Hotels, Zoëtry Wellness & Spa Resorts, Hyatt Ziva, Hyatt Zilara, Secrets Resorts & Spas, Dreams Resorts & Spas, Hyatt Vivid Hotels & Resorts, Sunscape Resorts & Spas, Alua Hotels & Resorts, Bahia Principe Hotels & Resorts, Grand Hyatt, Hyatt Regency, Destination by Hyatt, Hyatt Centric, Hyatt Vacation Club, Hyatt, Caption by Hyatt, Hyatt Place, Hyatt House, Hyatt Studios, Hyatt Select, and UrCove brands;

Source: Item 1 — Financial Statements. (FDD pages 156–187)

Question 26

How does the comfort letter fee in Item 7 relate to the Application Fee in Item 5 for The Standardx?

Accepted Answer

[Item 5: INITIAL FEES]

## Comfort Letter Fee

You must obtain a comfort letter or similar agreement, the current form of which is attached as Exhibit J, that we reasonably specify from each lender, each ground lessor (if applicable), the owner of fee simple title to the Hotel's real property or building and improvements (if you are not that owner), and each other entity with an interest (or any power or right, conditional or otherwise, to acquire an interest) in the Hotel's real property or building and improvements (each a "Comfort Letter Party"). Under this comfort letter or similar agreement, the Comfort Letter Party agrees (among other things) to assume your obligations under the Franchise Agreement (subject to our rights under the Franchise Agreement) if the Comfort Letter Party or any of its affiliates acquires title or otherwise assumes possession, or the right to sell or direct the disposition of, the Hotel's real property or building and improvements. You must pay our then applicable, non-refundable comfort letter fee, which currently is $2,500, for each comfort letter that we negotiate relating to the Hotel.

[Item 7: ESTIMATED INITIAL INVESTMENT]

| Type of expenditure | Amount | Method of Payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Application Fee (1) | $95,000 to $145,000 | Lump sum | Upon signing franchise application | Us |
| Comfort letter fee(s) | $0 to $2,500 | Lump sum | When your lender(s) sign a comfort letter with us | Us |

[Item 5: INITIAL FEES]

## Application Fee

You will pay us a lump-sum application fee (the "Application Fee") when you submit the franchise application through our online application portal. The Application Fee is $95,000 plus an additional $500 for each guest room in the Hotel over 200 rooms. If you withdraw your franchise application before we approve it, or if we do not approve your franchise application for any reason, then we will refund your Application Fee less a $7,500 fee to cover our costs for evaluating your application. After we approve your franchise application, the Application Fee is not refundable, even if we and you do not sign a Franchise Agreement. If you and we agree to add any guest rooms to the Hotel before the Hotel opens, then you must pay us, when we approve the additional guest rooms, an additional non-refundable Application Fee of $500 multiplied by the number of additional guest rooms over 200 total guest rooms at the Hotel.

Question 27

How does the comfort letter fee in Item 7 relate to the assistance The Standardx provides as outlined in Item 11?

Accepted Answer

| Type of expenditure | Amount | Method of Payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Application Fee (1) | $95,000 to $145,000 | Lump sum | Upon signing franchise application | Us |
| Comfort letter fee(s) | $0 to $2,500 | Lump sum | When your lender(s) sign a comfort letter with us | Us |

Question 28

How does the comfort letter fee in Item 7 relate to the financial statements provided in Item 1 for The Standardx?

Accepted Answer

| Type of expenditure | Amount | Method of Payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Application Fee (1) | $95,000 to $145,000 | Lump sum | Upon signing franchise application | Us |
| Comfort letter fee(s) | $0 to $2,500 | Lump sum | When your lender(s) sign a comfort letter with us | Us |

Question 29

How does the comfort letter fee in Item 7 relate to the ongoing fees described in Item 6 for The Standardx?

Accepted Answer

| Type of expenditure | Amount | Method of Payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Comfort letter fee(s) | $0 to $2,500 | Lump sum | When your lender(s) sign a comfort letter with us | Us |

## Comfort Letter Fee

You must obtain a comfort letter or similar agreement, the current form of which is attached as Exhibit J, that we reasonably specify from each lender, each ground lessor (if applicable), the owner of fee simple title to the Hotel's real property or building and improvements (if you are not that owner), and each other entity with an interest (or any power or right, conditional or otherwise, to acquire an interest) in the Hotel's real property or building and improvements (each a "Comfort Letter Party"). Under this comfort letter or similar agreement, the Comfort Letter Party agrees (among other things) to assume your obligations under the Franchise Agreement (subject to our rights under the Franchise Agreement) if the Comfort Letter Party or any of its affiliates acquires title or otherwise assumes possession, or the right to sell or direct the disposition of, the Hotel's real property or building and improvements. You must pay our then applicable, non-refundable comfort letter fee, which currently is $2,500, for each comfort letter that we negotiate relating to the Hotel.

## **Item 6**

## **OTHER FEES**

We group the ongoing fees that you will pay to us and other companies in the Hyatt Group when operating the Hotel into 3 categories. The first category includes the fees that the Franchise Agreement specifies. Except as described below, these fees are typically imposed and collected by and payable to us. The second category includes the fees for those System Services that we typically classify as Mandatory Services for Brand Hotels. The third category includes the fees for those System Services that we typically classify as Non-Mandatory Services for Brand Hotels. Depending on the particular circumstances of the Hotel, including its size, location and market positioning, we may reclassify some of the Mandatory Services listed below as Non-Mandatory Services and/or may reclassify some of the Non-Mandatory Services listed below as Mandatory

Services for the Hotel. The fees in the second and third group are typically imposed and collected by and payable to Hyatt Corporation. At times we may collect amounts on behalf of our affiliates for services that they provide to franchisees. This Item does not cover the ongoing fees or payments relating to the Hotel's operation that you pay directly to third parties.

Question 30

How does the comfort letter fee in Item 7 relate to the territory granted in Item 12 for The Standardx?

Accepted Answer

[Item 7: ESTIMATED INITIAL INVESTMENT]

| Type of expenditure | Amount | Method of Payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Application Fee (1) | $95,000 to $145,000 | Lump sum | Upon signing franchise application | Us |
| Comfort letter fee(s) | $0 to $2,500 | Lump sum | When your lender(s) sign a comfort letter with us | Us |
| Alternative Design | $0 to $30,000 | As agreed | As incurred | Us |
| Review Fee |  |  |  |  |
| Extension of opening deadline | $0 to $10,000 | As agreed | When you request extension of Hotel opening deadline | Us |
| IT Project Management Services fee and expense reimbursement | $64,995 to $69,630 | As agreed | Before the Hotel opens | Us |
| Signage | $65,000 to $100,000 | As agreed | As incurred | Suppliers |

Question 31

How does the executive experience of Jim Chu, as described in Item 2, relate to the assistance The Standardx provides to franchisees as outlined in Item 11?

Accepted Answer

## Executive Vice President – Chief Growth Officer: Jim Chu

Mr. Chu has been our and Hyatt Hotels Corporation's Executive Vice President – Chief Growth Officer since June 2022. From March 2021 until May 2022, he was our and Hyatt Hotels Corporation's Executive Vice President – Global Franchising and Development. From March 2018 until February 2021, he was our and Hyatt Hotels Corporation's Global Head of Development and Owner Relations. Each of Mr. Chu's positions with us and our affiliates has been in Chicago, Illinois. As of July 1, 2025, we expect Mr. Chu to become our and Hyatt Hotels Corporation's Head of Owner Relations.

Question 32

How does the experience of Jim Chu in Item 2 relate to the Application Fee refund policy in Item 5 for The Standardx?

Accepted Answer

plication Fee

You will pay us a lump-sum application fee (the "Application Fee") when you submit the franchise application through our online application portal. The Application Fee is \$95,000 plus an additional \$500 for each guest room in the Hotel over 200 rooms. If you withdraw your franchise application before we approve it, or if we do not approve your franchise application for any reason, then we will refund your Application Fee less a \$7,500 fee to cover our costs for evaluating your application. After we approve your franchise application, the Application Fee is not refundable, even if we and you do not sign a Franch

Question 33

How does the experience of Jim Chu in Item 2 relate to the financial obligations of the franchisee as described in Item 9 for The Standardx?

Accepted Answer

We do not have a fixed financial assistance program for our franchisees and typically do not offer financial assistance to franchisees. However, in some cases we periodically may offer financial assistance to franchisees developing new Brand Hotels or converting existing hotels from other brands to the Hotel System. We have no formal criteria to determine which franchisees will receive financial assistance or the amount or timing of the assistance. The terms of any financial assistance, including amount, interest rate, and repayment terms, will vary widely and depend on our agreement with the franchisee and its particular circumstances. Our decision to offer financial assistance depends on what we think is best for us and the Brand Hotel franchise network. We have no obligation to offer financial assistance to any franchisee.

Question 34

How does the experience of Jim Chu in Item 2 relate to the growth and development of The Standardx as reflected in the financial statements in Item 1?

Accepted Answer

The unaudited condensed consolidated financial statements and accompanying footnotes (the "Notes") have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information, the instructions to Form 10-Q, and Article 10 of Regulation S-X. Accordingly, they do not include all information or footnotes required by GAAP for complete annual financial statements. As a result, this Quarterly Report should be read in conjunction with the consolidated financial statements and accompanying footnotes in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "2024 Form 10-K").

We have eliminated all intercompany accounts and transactions in our condensed consolidated financial statements. We consolidate entities under our control, including entities where we are deemed to be the primary beneficiary.

Management believes the accompanying condensed consolidated financial statements reflect all adjustments, which are all of a normal recurring nature, considered necessary for a fair presentation of the interim periods.

#### Table of Contents

Transaction and Integration Costs—During the year ended December 31, 2024, we presented a new financial statement line item to provide enhanced visibility on our condensed consolidated statements of income and reclassified prior-period results for comparability. Transaction and integration costs include the following:

- integration costs, which were recognized in integration costs during the three months ended March 31, 2024 and primarily include expenses incurred related to the integration of recently acquired businesses, including certain compensation expenses, professional fees, sales and marketing expenses, and technology expenses;
- transaction costs for potential transactions, primarily related to professional fees incurred for acquisitions and dispositions, which were recognized in general and administrative expenses during the three months ended March 31, 2024; and
- transaction costs for transactions completed during the period, primarily related to professional fees incurred for acquisitions, which were recognized in other income (loss), net during the three months ended March 31, 2024. Transaction costs incurred during the period of a completed disposition continue to be recognized in gains on sales of real estate and other.

#### 2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

#### Future Adoption of Accounting Standards

Question 35

How does the experience of Jim Chu in Item 2 relate to the potential costs associated with Alternative Design as listed in Item 7 for The Standardx?

Accepted Answer

*YOUR ESTIMATED INITIAL INVESTMENT**

| Type of expenditure | Amount | Method of Payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Application Fee (1) | $95,000 to $145,000 | Lum

Question 36

How does the experience of Jim Chu in Item 2 relate to the potential for litigation against franchisees as described in Item 3 for The Standardx?

Accepted Answer

[Item 3: Litigation]

## **Item 3**

## **LITIGATION**

## **Litigation Against Franchisees in the Last Fiscal Year**

During the 2024 fiscal year, we brought a claim against franchisees as follows:

*Hyatt Franchising, L.L.C. v. Imperial Hotels, LLC, Sunikumar Patel, Akash Maheshwari, Roshni Jariwala Desai, Madhvan Nair, Daksha Patel, Sanjay Desai, Raj Gandhi, Usha Patel, Vinod Jayrambhai Patel and Mina Jariwala*, No. 01-24-0008-8964 (AAA 2024) (Unpaid Royalty Fees).

Other than as described above, no litigation is required to be disclosed in this Item.

Question 37

How does the experience of Jim Chu in Item 2 relate to the restrictions on sources of products and services outlined in Item 8 for The Standardx?

Accepted Answer

lier to Brand Hotel franchisees.

However, you must buy or lease most other products and services for your Hotel according to our System Standards. We issue and modify standards and specifications based on our, our affiliates' and our franchisees' experience in operating Brand Hotels and other Hyatt Network Hotels. Our standards and specifications may impose minimum requirements for delivery, performance, reputation, prices, quality, design, and appearance, among other factors. You must ensure that the Hotel strictly complies with all applicable laws and maintains adequate insurance policy coverage in the amounts that we periodically specify. Our System Standards or other communications will identify our standards and specific

Question 38

How does the experience of Jim Chu in Item 2 relate to the territory granted in Item 12 for The Standardx?

Accepted Answer

Mr. Chu has been our and Hyatt Hotels Corporation's Executive Vice President – Chief Growth Officer since June 2022. From March 2021 until May 2022, he was our and Hyatt Hotels Corporation's Executive Vice President – Global Franchising and Development. From March 2018 until February 2021, he was our and Hyatt Hotels Corporation's Global Head of Development and Owner Relations. Each of Mr. Chu's positions with us and our affiliates has been in Chicago, Illinois. As of July 1, 2025, we expect Mr. Chu to become our and Hyatt Hotels Corporation's Head of Owner Relations.

Question 39

How do the financial statements in Item 1 relate to the potential for litigation against franchisees as described in Item 3 for The Standardx?

Accepted Answer

During the 2024 fiscal year, we brought a claim against franchisees as follows:

*Hyatt Franchising, L.L.C. v. Imperial Hotels, LLC, Sunikumar Patel, Akash Maheshwari, Roshni Jariwala Desai, Madhvan Nair, Daksha Patel, Sanjay Desai, Raj Gandhi, Usha Patel, Vinod Jayrambhai Patel and Mina Jariwala*, No. 01-24-0008-8964 (AAA 2024) (Unpaid Royalty Fees).

Other than as described above, no litigation is required to be disclosed in this Item.

At March 31, 2025, we are not aware, nor have we received any notification, that our third-party owners, franchisees, or unconsolidated hospitality ventures are not current on their debt service obligations where we have provided a debt repayment guarantee.

Other Guarantees—We may be obligated to fund up to $146 million related to certain guarantees as a result of the UVC Transaction (see Note 4). At March 31, 2025 and December 31, 2024, we had $62 million and $67 million, respectively, of guarantee liabilities recorded in other long-term liabilities on our condensed consolidated balance sheets associated with these guarantees.

Guarantee Liabilities Fair Value—We estimated the fair value of our guarantees to be $220 million and $213 million at March 31, 2025 and December 31, 2024, respectively. Based on the lack of available market data, we have classified our guarantees as Level Three in the fair value hierarchy.

Question 40

What are the interest rates for The Standardx's 2025 and 2030 Notes?

Accepted Answer

2028 at an issue price of 99.866% (the "2028 Notes").
- In 2020, we issued \$450 million of 5.375% senior notes due 2025 (the "2025 Notes") and \$450 mill

Source: Item 10 — OTHER ASSETS (FDD pages 132–156)

Question 41

How does the lack of bankruptcy disclosure in Item 4 relate to the assistance The Standardx provides as outlined in Item 11?

Accepted Answer

## **Item 4**

## **BANKRUPTCY**

No bankruptcy is required to be disclosed in this Item.

Question 42

How does the lack of bankruptcy disclosure in Item 4 relate to the experience of Jim Chu as described in Item 2 for The Standardx?

Accepted Answer

## **Item 4**

## **BANKRUPTCY**

No bankruptcy is required to be disclosed in this Item.

## **BUSINESS EXPERIENCE**

## Executive Vice President – Chief Growth Officer: Jim Chu

Mr. Chu has been our and Hyatt Hotels Corporation's Executive Vice President – Chief Growth Officer since June 2022. From March 2021 until May 2022, he was our and Hyatt Hotels Corporation's Executive Vice President – Global Franchising and Development. From March 2018 until February 2021, he was our and Hyatt Hotels Corporation's Global Head of Development and Owner Relations. Each of Mr. Chu's positions with us and our affiliates has been in Chicago, Illinois. As of July 1, 2025, we expect Mr. Chu to become our and Hyatt Hotels Corporation's Head of Owner Relations.

Question 43

How does the lack of bankruptcy disclosure in Item 4 relate to the financial obligations of the franchisee as described in Item 9 for The Standardx?

Accepted Answer

[Item 9: Franchisee's Obligations]

| Obligation | Section in agreement | Disclosure document item |
|---|---|---|
| a. Site selection and | 1.1, 2.5 and 2.6 of Franchise | 7 and 11 |
| acquisition/lease | Agreement |  |
| Obligation | Section | Disclosure |
|  | in agreement | document item |
| b. Pre-opening purchases/leases | 2.1, 2.2, 2.5, 2.7, 3.3, 4.3, 4.4, 5.1, Article 9 and Exhibit B-1 of Franchise Agreement | 5, 7, 8 and 11 |
| c. Site development and other pre-opening requirements | 2.1 to 2.4 and Exhibit B-3 of Franchise Agreement; Revenue Management Services Program Schedule | 5, 7, 8 and 11 |
| d. Initial and ongoing training | 3.1, 3.4, 4.2 and 12.4 of Franchise Agreement | 5, 6, 7 and 11 |
| e. Opening | 2.5 of Franchise Agreement | 5 and 11 |
| f. Fees | 2.2, 2.5, 3.1, 3.3, 3.4, 4.1, 4.2, 4.4, 4.8, 5.3, 7.5, 8.3, 12.4, 12.8, 13.2, 14.4, 16.1, 16.2 and 16.5 and Articles 3, 6, 9 and 10 and Exhibit B-1 of Franchise Agreement; Franchise Application; 7 of Confidentiality Agreement; Schedules to Central Services Agreement | 5, 6, 7, 8 and 11 |
| g. Compliance with standards and policies/operating manual | 2.1 to 2.3, 2.6, 3.2, 3.3, 5.1, 5.3, 5.4, 7.4 and 11.2 and Article 4 of Franchise Agreement; Management Company Rider | 6, 8, 11, 13, 14 and 15 |
| h. Trademarks and proprietary information | 3.2, 5.3 and 16.1 and Article 11 of Franchise Agreement; Confidentiality Agreement; Management Company Rider; 6 of Central Services Agreement | 11, 13 and 14 |
| i. Restrictions on | 4.1, 4.3, 4.4, 4.5 and 4.6 of Franchise | 8, 11 and 16 |
| products/services offered | Agreement |  |
| j. Warranty and customer | 4.3 and 4.5 of Franchise Agreement | 8, 12 and 16 |
| service requirements |  |  |
| k. Territorial development and | Not applicable | Not applicable |
| sales quotas |  |  |
| l. Ongoing product/service purchases | 3.2, 3.3, 4.1, 4.3, 4.4, 4.5, and 4.6 of Franchise Agreement; Schedules to Central Services Agreement | 5, 6, 7, 8 and 11 |
| m. Maintenance, appearance and remodeling requirements | 3.2, 4.3, 4.4, 4.6, 4.7, 4.8 and 10.2 of Franchise Agreement | 8, 11 and 16 |
| n. Insurance | Article 9 of Franchise Agreement; 8 of Central Services Agreement | 6, 7 and 8 |
| Obligation | Section | Disclosure |
|  | in agreement | document item |
| o. Advertising | 4.1, 4.3, 4.5 and Article 5 of Franchise Agreement | 6, 8 and 11 |
| p. Indemnification | 2.5 and 8.3 of Franchise Agreement; 7 of Confidentiality Agreement; 9 of Central Services Agreement | 6 |
| q. Owner’s participation/ management/staffing | 3.1, 3.2, 4.2 and 4.6 of Franchise Agreement; Management Company Rider; Revenue Management Services Program Schedule | 5, 7, 11 and 15 |
| r. Records and reports | 4.3 and 4.7 and Article 7 of Franchise Agreement | 6 |
| s. Inspections and audits | 4.3, 4.8, 7.4 and 7.5 of Franchise Agreement | 6 |
| t. Transfer | 12.2 to 12.9 of Franchise Agreement and 8(e) of Confidentiality Agreement; 13 of Central Services Agreement | 6 and 17 |
| u. Renewal | Article 13 of Franchise Agreement | 6 and 17 |
| v. Post-termination obligations | 12.4 and Articles 10, 14 and 16 of Franchise Agreement; 6 and 9 of Central Services Agreement | 6, 13, 14 and 17 |
| w. Non-competition covenants | 4.2, 4.10 and 4.11 of Franchise Agreement | 15 and 17 |
| x. Dispute resolution | Article 14 of Franchise Agreement; 8 of Confidentiality Agreement; 11 of Central Services Agreement | 6 and 17 |
| y. Honoring guest room rates | 3.3 and 4.5 of Franchise Agreement | 8 |
| z. Guarantor Monetary | 12.1 of Franchise Agreement and | 15 |
| Threshold | Guaranty |  |
| aa. Right of first offer | Exhibit C of Franchise Agreement | 17 |

Question 44

How does the lack of bankruptcy disclosure in Item 4 relate to the financial statements provided in Item 1 for The Standardx?

Accepted Answer

[Item 4: Bankruptcy]

## **Item 4**

## **BANKRUPTCY**

No bankruptcy is required to be disclosed in this Item.

Question 45

How does the lack of bankruptcy disclosure in Item 4 relate to the potential for litigation against franchisees as described in Item 3 for The Standardx?

Accepted Answer

During the 2024 fiscal year, we brought a claim against franchisees as follows:

*Hyatt Franchising, L.L.C. v. Imperial Hotels, LLC, Sunikumar Patel, Akash Maheshwari, Roshni Jariwala Desai, Madhvan Nair, Daksha Patel, Sanjay Desai, Raj Gandhi, Usha Patel, Vinod Jayrambhai Patel and Mina Jariwala*, No. 01-24-0008-8964 (AAA 2024) (Unpaid Royalty Fees).

Other than as described above, no litigation is required to be disclosed in this Item.

Question 46

How does the lack of bankruptcy disclosure in Item 4 relate to the restrictions on sources of products and services outlined in Item 8 for The Standardx?

Accepted Answer

You must operate the Hotel according to our System Standards, which may regulate, among other things, the types, models, and brands of products and services your Hotel uses; required and authorized products and services that the Hotel must offer to customers and quality standards for those products and services (including F&B Operations, as defined below); and designated and approved suppliers of these products and services, which may include or be limited to us and/or our affiliates that we may designate. "F&B Operations" means all food and beverage operations for Hotel guests and patrons consisting of the following (in each case, to the extent applicable): (a) restaurant, dining, bar, lounge, and retail food and beverage services; (b) banquet, meeting, event, catering (including outside catering) and room services; (c) a multi-functional

service area that serves coffee and breakfast, lunch and dinner menu items, and alcoholic beverages; (d) grab-and-go food and beverage items available for purchase in a Hotel market; (e) a communal area serving as a combination restaurant, bar, coffee shop and workplace; (f) a standalone restaurant and/or rooftop bar; and (g) all other food, beverage and related services at the Hotel.

If you are constructing a new Brand Hotel or converting an existing hotel or other building to a Brand Hotel, we or Hyatt Corporation will advise you on the System Standards to be met, the aesthetics to be reflected, and the systems to be installed at the Hotel, so the Hotel can be opened and operated as a Brand Hotel. You and we or Hyatt Corporation will determine the types and levels of services and assistance you will receive and the fees you will pay for the services. We and Hyatt Corporation are the only approved suppliers for these services if you are constructing a new Hotel. We also provide IT Project Management Services and other technology-related services.

You must use the Opera PMS at the Hotel. We will provide services necessary to install access to the PMS at the Hotel under the Franchise Agreement. You must also sign an agreement with our designated supplier to provide connectivity services and training for the PMS.

Question 47

How does the lack of site selection assistance from The Standardx in Item 11 relate to the financial obligations of the franchisee as described in Item 9?

Accepted Answer

PUTER SYSTEMS, AND TRAINING**

**Except as listed below, Hyatt Franchising, L.L.C. is not required to provide you with any assistance.**

Before you begin operating the Hotel, we or another member of the Hyatt Group will:

- 1. Approve a site for the Hotel that meets our requirements. We do not provide any site selection assistance or specify an area within which you may look for a site. We do not own hotel premises and lease them to franchisees. In determining whether to approve a site, we consider, among other things, demographic characteristics, traffic patterns, parking, visibility, allowed signage, the predominant character of the neighborhood, competition from other lodging facilities in the area, the nature of other businesses near the site, and other commercial characteristics (including the purchase price or rental obligations and other lease terms) and the proposed site's size, appearance, and other physical characteristics. You may not develop a Brand Hotel at a site that we do not approve. We and you will not sign a Franchise Agreement until you have located and we have approved the Hotel's site. If you are converting an existing hotel from another brand to the Hotel System, we will inspect the hotel and prepare a PIP to provide details on our upgrade requirements. Each Comfort Letter Party must sign a comfort letter or similar agreement that we reasonably specify. (Sections 2.1 and 2.7 of Franchise Agreement)
- 2. Communicate our then current specifications and requirements for designing and developing a Brand Hotel, including the Design and Construction Standards.

Question 48

How does the lack of site selection assistance from The Standardx in Item 11 relate to the financial statements provided in Item 1?

Accepted Answer

Before you begin operating the Hotel, we or another member of the Hyatt Group will:

- 1. Approve a site for the Hotel that meets our requirements. We do not provide any site selection assistance or specify an area within which you may look for a site. We do not own hotel premises and lease them to franchisees. In determining whether to approve a site, we consider, among other things, demographic characteristics, traffic patterns, parking, visibility, allowed signage, the predominant character of the neighborhood, competition from other lodging facilities in the area, the nature of other businesses near the site, and other commercial characteristics (including the purchase price or rental obligations and other lease terms) and the proposed site's size, appearance, and other physical characteristics. You may not develop a Brand Hotel at a site that we do not approve. We and you will not sign a Franchise Agreement until you have located and we have approved the Hotel's site. If you are converting an existing hotel from another brand to the Hotel System, we will inspect the hotel and prepare a PIP to provide details on our upgrade requirements. Each Comfort Letter Party must sign a comfort letter or similar agreement that we reasonably specify. (Sections 2.1 and 2.7 of Franchise Agreement)

Question 49

How does the lack of site selection assistance from The Standardx in Item 11 relate to the franchisee's obligations regarding site selection in Item 9?

Accepted Answer

PUTER SYSTEMS, AND TRAINING**

**Except as listed below, Hyatt Franchising, L.L.C. is not required to provide you with any assistance.**

Before you begin operating the Hotel, we or another member of the Hyatt Group will:

- 1. Approve a site for the Hotel that meets our requirements. We do not provide any site selection assistance or specify an area within which you may look for a site. We do not own hotel premises and lease them to franchisees. In determining whether to approve a site, we consider, among other things, demographic characteristics, traffic patterns, parking, visibility, allowed signage, the predominant character of the neighborhood, competition from other lodging facilities in the area, the nature of other businesses near the site, and other commercial characteristics (including the purchase price or rental obligations and other lease terms) and the proposed site's size, appearance, and other physical characteristics. You may not develop a Brand Hotel at a site that we do not approve. We and you will not sign a Franchise Agreement until you have located and we have approved the Hotel's site. If you are converting an existing hotel from another brand to the Hotel System, we will inspect the hotel and prepare a PIP to provide details on our upgrade requirements. Each Comfort Letter Party must sign a comfort letter or similar agreement that we reasonably specify. (Sections 2.1 and 2.7 of Franchise Agreement)
- 2. Communicate our then current specifications and requirements for designing and developing a Brand Hotel, including the Design and Construction Standards.

Question 50

How does the lack of site selection assistance from The Standardx in Item 11 relate to the potential for litigation against franchisees as described in Item 3?

Accepted Answer

Before you begin operating the Hotel, we or another member of the Hyatt Group will:

- 1. Approve a site for the Hotel that meets our requirements. We do not provide any site selection assistance or specify an area within which you may look for a site. We do not own hotel premises and lease them to franchisees. In determining whether to approve a site, we consider, among other things, demographic characteristics, traffic patterns, parking, visibility, allowed signage, the predominant character of the neighborhood, competition from other lodging facilities in the area, the nature of other businesses near the site, and other commercial characteristics (including the purchase price or rental obligations and other lease terms) and the proposed site's size, appearance, and other physical characteristics. You may not develop a Brand Hotel at a site that we do not approve. We and you will not sign a Franchise Agreement until you have located and we have approved the Hotel's site. If you are converting an existing hotel from another brand to the Hotel System, we will inspect the hotel and prepare a PIP to provide details on our upgrade requirements. Each Comfort Letter Party must sign a comfort letter or similar agreement that we reasonably specify. (Sections 2.1 and 2.7 of Franchise Agreement)

Question 51

How does The Standardx's litigation history against franchisees in Item 3 relate to the franchisee's obligations outlined in Item 9?

Accepted Answer

During the 2024 fiscal year, we brought a claim against franchisees as follows:

*Hyatt Franchising, L.L.C. v. Imperial Hotels, LLC, Sunikumar Patel, Akash Maheshwari, Roshni Jariwala Desai, Madhvan Nair, Daksha Patel, Sanjay Desai, Raj Gandhi, Usha Patel, Vinod Jayrambhai Patel and Mina Jariwala*, No. 01-24-0008-8964 (AAA 2024) (Unpaid Royalty Fees).

Other than as described above, no litigation is required to be disclosed in this Item.

Question 52

How does the litigation history in Item 3 relate to the financial performance of The Standardx as shown in the financial statements in Item 1?

Accepted Answer

Standard International—During the year ended December 31, 2024, we acquired 100% of the issued and outstanding equity interests of certain entities collectively doing business as Standard International for \$150 million of base consideration, subject to customary adjustments related to working capital, cash, and indebtedness, and up to an additional \$185 million of contingent consideration to be paid upon the achievement of certain milestones related to the development of additional hotels and/or potential new hotels identified by the sellers through 2028.

We closed on the transaction on October 1, 2024 and paid \$151 million of cash. Upon acquisition, we recorded a \$108 million contingent consideration liability at fair value in other long-term liabilities on our condensed consolidated balance sheet. The fair value was estimated using a Monte Carlo simulation to model the likelihood of achieving the agreed-upon milestones based on available information as of the acquisition date. The valuation methodology includes assumptions and judgments regarding the discount rate, estimated probability of achieving the milestones, and expected timing of payments, which are primarily Level Three assumptions. Total purchase consideration was determined as follows:

| Cash paid, net of cash acquired        | \$ 148 |
|----------------------------------------|-----------|
| Cash acquired                          | 3         |
| Fair value of contingent consideration | 108       |
| Total purchase consideration           | \$ 259 |

The acquisition includes management, franchise, and license agreements for both operating and additional hotels that are expected to open in the future and the affiliated trade names. Following the acquisition date, fee revenues and operating expenses of Standard International were recognized on our condensed consolidated statements of income.

Our condensed consolidated balance sheets at both March 31, 2025 and December 31, 2024 reflect preliminary estimates of the fair value of the assets acquired and liabilities assumed based on available information

as of the acquisition date. The fair values of intangible assets acquired were estimated using either discounted future cash flow models or the relief from royalty method, both of which include revenue projections based on the expected contract terms and long-term growth rates, which are primarily Level Three assumptions. The fair values of performance guarantee liabilities assumed were estimated using Monte Carlo simulations to model the probability of possible outcomes (see Note 12). The valuation methodology includes assumptions and judgments regarding discount rates, volatility, and hotel operating results, which are primarily Level Three assumptions. The remaining assets and liabilities were recorded at their carrying values, which approximate their fair values.

During the three months ended March 31, 2025, the fair values of certain assets acquired and liabilities assumed were revised. The measurement period adjustments primarily resulted from the refinement of certain assumptions, including contract terms, renewal periods, and useful lives, which affected the underlying cash flows in the valuation, and were based on facts and circumstances that existed at the acquisition date. Measurement period adjustments recorded on our condensed consolidated balance sheet at March 31, 2025 include a \$41 million decrease in intangibles, net with a corresponding increase in goodwill. During the three months ended March 31, 2025, we recognized an insignificant reduction of amortization expense on our condensed consolidated statements of income for the amount that would have not been recognized during the year ended December 31, 2024, if the measurement period adjustments would have been made as of the acquisition date.

Question 53

How does the litigation history in Item 3 relate to the franchisee's obligations regarding site selection and operation as described in Item 9 for The Standardx?

Accepted Answer

[Item 3: Litigation]

## **Item 3**

## **LITIGATION**

## **Litigation Against Franchisees in the Last Fiscal Year**

During the 2024 fiscal year, we brought a claim against franchisees as follows:

*Hyatt Franchising, L.L.C. v. Imperial Hotels, LLC, Sunikumar Patel, Akash Maheshwari, Roshni Jariwala Desai, Madhvan Nair, Daksha Patel, Sanjay Desai, Raj Gandhi, Usha Patel, Vinod Jayrambhai Patel and Mina Jariwala*, No. 01-24-0008-8964 (AAA 2024) (Unpaid Royalty Fees).

Other than as described above, no litigation is required to be disclosed in this Item.

---

[Item 9: Franchisee's Obligations]

| Obligation | Section in agreement | Disclosure document item |
|---|---|---|
| a. Site selection and | 1.1, 2.5 and 2.6 of Franchise | 7 and 11 |
| acquisition/lease | Agreement |  |
| Obligation | Section | Disclosure |
|  | in agreement | document item |
| b. Pre-opening purchases/leases | 2.1, 2.2, 2.5, 2.7, 3.3, 4.3, 4.4, 5.1, Article 9 and Exhibit B-1 of Franchise Agreement | 5, 7, 8 and 11 |
| c. Site development and other pre-opening requirements | 2.1 to 2.4 and Exhibit B-3 of Franchise Agreement; Revenue Management Services Program Schedule | 5, 7, 8 and 11 |
| d. Initial and ongoing training | 3.1, 3.4, 4.2 and 12.4 of Franchise Agreement | 5, 6, 7 and 11 |
| e. Opening | 2.5 of Franchise Agreement | 5 and 11 |
| f. Fees | 2.2, 2.5, 3.1, 3.3, 3.4, 4.1, 4.2, 4.4, 4.8, 5.3, 7.5, 8.3, 12.4, 12.8, 13.2, 14.4, 16.1, 16.2 and 16.5 and Articles 3, 6, 9 and 10 and Exhibit B-1 of Franchise Agreement; Franchise Application; 7 of Confidentiality Agreement; Schedules to Central Services Agreement | 5, 6, 7, 8 and 11 |
| g. Compliance with standards and policies/operating manual | 2.1 to 2.3, 2.6, 3.2, 3.3, 5.1, 5.3, 5.4, 7.4 and 11.2 and Article 4 of Franchise Agreement; Management Company Rider | 6, 8, 11, 13, 14 and 15 |
| h. Trademarks and proprietary information | 3.2, 5.3 and 16.1 and Article 11 of Franchise Agreement; Confidentiality Agreement; Management Company Rider; 6 of Central Services Agreement | 11, 13 and 14 |
| i. Restrictions on | 4.1, 4.3, 4.4, 4.5 and 4.6 of Franchise |
| products/services offered | Agreement |  |
| j. Warranty and customer | 4.3 and 4.5 of Franchise Agreement | 8, 12 and 16 |
| service requirements |  |  |
| k. Territorial development and | Not applicable | Not applicable |
| sales quotas |  |  |
| l. Ongoing product/service purchases | 3.2, 3.3, 4.1, 4.3, 4.4, 4.5, and 4.6 of Franchise Agreement; Schedules to Central Services Agreement | 5, 6, 7, 8 and 11 |
| m. Maintenance, appearance and remodeling requirements | 3.2, 4.3, 4.4, 4.6, 4.7, 4.8 and 10.2 of Franchise Agreement | 8, 11 and 16 |
| n. Insurance | Article 9 of Franchise Agreement; 8 of Central Services Agreement | 6, 7 and 8 |
| Obligation | Section |
|  | in agreement |
| o. Advertising | 4.1, 4.3, 4.5 and Article 5 of Franchise Agreement | 6, 8 and 11 |
| p. Indemnification | 2.5 and 8.3 of Franchise Agreement; 7 of Confidentiality Agreement; 9 of Central Services Agreement | 6 |
| q. Owner’s participation/ management/staffing | 3.1, 3.2, 4.2 and 4.6 of Franchise Agreement; Management Company Rider; Revenue Management Services Program Schedule | 5, 7, 11 and 15 |
| r. Records and reports | 4.3 and 4.7 and Article 7 of Franchise Agreement | 6 |
| s. Inspections and audits | 4.3, 4.8, 7.4 and 7.5 of Franchise Agreement | 6 |
| t. Transfer | 12.2 to 12.9 of Franchise Agreement and 8(e) of Confidentiality Agreement; 13 of Central Services Agreement | 6 and 17 |
| u. Renewal | Article 13 of Franchise Agreement | 6 and 17 |
| v. Post-termination obligations | 12.4 and Articles 10, 14 and 16 of Franchise Agreement; 6 and 9 of Central Services Agreement | 6, 13, 14 and 17 |
| w. Non-competition covenants | 4.2, 4.10 and 4.11 of Franchise Agreement | 15 and 17 |
| x. Dispute resolution | Article 14 of Franchise Agreement; 8 of Confidentiality Agreement; 11 of Central Services Agreement | 6 and 17 |
| y. Honoring guest room rates | 3.3 and 4.5 of Franchise Agreement | 8 |
| z. Guarantor Monetary | 12.1 of Franchise Agreement and |
| Threshold | Guaranty |  |
| aa. Right of first offer | Exhibit C of Franchise Agreement | 17 |

Question 54

What is the range of the Application Fee for The Standardx as stated in Item 5, and how does this compare to the estimated total initial investment range in Item 7?

Accepted Answer

plication Fee

You will pay us a lump-sum application fee (the "Application Fee") when you submit the franchise application through our online application portal. The Application Fee is \$95,000 plus an additional \$500 for each guest room in the Hotel over 200 rooms. If you withdraw your franchise application before we approve it, or if we do not approve your franchise application for any reason, then we will refund your Application Fee less a \$7,500 fee to cover our costs for evaluating your application.

Question 55

What are the restrictions on sources of products and services as described in Item 8, and how do these restrictions affect the estimated initial investment outlined in Item 7 for The Standardx?

Accepted Answer

IONS ON SOURCES OF PRODUCTS AND SERVICES**

You must operate the Hotel according to our System Standards, which may regulate, among other things, the types, models, and brands of products and services your Hotel uses; required and authorized products and services that the Hotel must offer to customers and quality standards for those products and services (including F&B Operations, as defined below); and designated and approved suppliers of these products and services, which may include or be limited to us and/or our affiliates that we may designate. "F&B Operations" means all food and beverage operations for Hotel guests and patrons consisting of the following (in each case, to the extent applicable): (a) restaurant, dining, bar, lounge, and retail food and beverage services; (b) banquet, meeting, event, catering (including outside catering) and room services; (c) a multi-functional

service area that serves coffee and breakfast, lunch and dinner menu items, and alcoholic beverages; (d) grab-and-go food and beverage items available for purchase in a Hotel market; (e) a communal area serving as a combination restaurant, bar, coffee shop and workplace; (f) a standalone restaurant and/or rooftop bar; and (g) all other food, beverage and related services at the Hotel.

If you are constructing a new Brand Hotel or converting an existing hotel or other building to a Brand Hotel, we or Hyatt Corporation will advise you on the System Standards to be met, the aesthetics to be reflected, and the systems to be installed at the Hotel, so the Hotel can be opened and operated as a Brand Hotel. You and we or Hyatt Corporation will determine the types and levels of services and assistance you will receive and the fees you will pay for the services. We and Hyatt Corporation are the only approved suppliers for these services if you are constructing a new Hotel. We also provide IT Project Management Services and other technology-related services.

You must use the Opera PMS at the Hotel. We will provide services necessary to install access to the PMS at the Hotel under the Franchise Agreement. You must also sign an agreement with our designated supplier to provide connectivity services and training for the PMS.

## System Services

Mandatory Services and Non Mandatory Services comprise the System Services. If you are in full compliance with your obligations under the Franchise Agreement, we or one or more members of the Hyatt Group will provide you those System Services that we periodically specify. You must participate in all Mandatory Services and related programs, and may (at your option) participate in any or all Non-Mandatory Services and related programs, in the manner that we periodically specify. You must acquire all Mandatory Services (as we periodically modify them) only from a member of the Hyatt Group. We may periodically add to, delete from, and otherwise modify these System Services, and the scope of and manner of providing System Services, upon notice to you. Also, due to the differences in products, services, markets and hospitality experiences among Brand Hotels and other Hyatt Network Hotels, we may, where we deem appropriate in our judgment: (a) classify certain System Services as Mandatory Services for the Hotel which we classify as Non-Mandatory Services or do not offer to other Brand Hotels and/or other Hyatt Network Hotels; (b) not provide to the Hotel certain System Services that we provide to other Brand Hotels and/or other Hyatt Network Hotels; and (c) limit the scope of those System Services provided to franchised Brand Hotels, such as by limiting the access that franchised Brand Hotels have to certain customer and other proprietary information for Hyatt Network Hotels other than the Hotel. We describe the current System Services and the current charges for those System Services in Item 6, including all of the services offered pursuant to the Central Services Agreement, which are generally Non-Mandatory Services but in certain circumstances may be designated as Mandatory Services as a condition of our approval of the Hotel's management company, as consideration for other items negotiated as part of the Franchise Agreement, or as part of the requirements of the Quality Assurance and Compliance Program.

Question 56

How does the site selection assistance described in Item 11 relate to the site selection obligations of the franchisee in Item 9?

Accepted Answer

valuation allowance recorded on U.S. federal and state deferred tax assets.

# **EXHIBIT A-2**

#### PART I. FINANCIAL INFORMATION

## **Item 11**

## **FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING**

**Except as listed below, Hyatt Franchising, L.L.C. is not required to provide you with any assistance.**

Before you begin operating the Hotel, we or another member of the Hyatt Group will:

- 1. Approve a site for the Hotel that meets our requirements. We do not provide any site selection assistance or specify an area within which you may look for a site. We do not own hotel premises and lease them to franchisees. In determining whether to approve a site, we consider, among other things, demographic characteristics, traffic patterns, parking, visibility, allowed signage, the predominant character of the neighborhood, competition from other lodging facilities in the area, the nature of other businesses near the site, and other commercial characteristics (including the purchase price or rental obligations and other lease terms) and the proposed site's size, appearance, and other physical characteristics. You may not develop a Brand Hotel at a site that we do not approve. We and you will not sign a Franchise Agreement until you have located and we have approved the Hotel's site. If you are converting an existing hotel from another brand to the Hotel System, we will inspect the hotel and prepare a PIP to provide details on our upgrade requirements. Each Comfort Letter Party must sign a comfort letter or similar agreement that we reasonably specify. (Sections 2.1 and 2.7 of Franchise Agreement)
- 2. Communicate our then current specifications and requirements for designing and developing a Brand Hotel, including the Design and Construction Standards. We will provide a briefing virtually, at our headquarters, or at another location we designate, to acquaint your managing owner or senior operations officer with our building process and support structure. If you are constructing a new Hotel at the site, you must design and construct the Hotel according to our Design and Construction Standards and Hotel System, and we and/or Hyatt Corporation will provide technical and design assistance related to the Hotel's development. If you are converting an existing hotel from another brand to the Hotel System, you must renovate the Hotel according to the PIP, which may reference some or all of our Design and Construction Standards and the Hotel System. The PIP is attached to the Franchise Agreement when we and you sign it. You may not

make any material changes to plans set forth in the PIP (including any changes to any structural or life safety equipment or systems, the number and/or type of guest rooms or common areas, or any architectural features), without our prior written consent, which we will not unreasonably withhold.

Question 57

Which states listed have a pending effective date for The Standardx franchise?

Accepted Answer

| State        | Effective Date               |
|--------------|------------------------------|
| California | June 11, 2025 (Exempt) |
| Hawaii | Pending |
| Illinois | June 11, 2025 (Exempt) |
| Indiana | June 11, 2025 |
| Maryland | Pending (Exempt) |
| Michigan | June 11, 2025 |
| Minnesota | Pending |
| New York | June 11, 2025 (Exempt) |
| North Dakota | Pending (Exempt) |
| Rhode Island | Pending |
| South Dakota | June 11, 2025 |
| Virginia | Pending |
| Washington | 2025 (Exempt) June 11, |
| Wisconsin | June 11, 2025 |
Other states may require registration, filing, or exemption of a franchise under other laws, such as those that regulate the offer and sale of business opportunities or seller-assisted marketing plans.

## **RECEIPT**

This disclosure document summarizes certain provisions of the franchise agreement and other information in plain language.

Source: Item 18 — OTHER INCOME (LOSS), NET (FDD pages 187–399)

Question 58

How does the territory granted in Item 12 relate to the potential for litigation against franchisees as described in Item 3 for The Standardx?

Accepted Answer

During the 2024 fiscal year, we brought a claim against franchisees as follows:

*Hyatt Franchising, L.L.C. v. Imperial Hotels, LLC, Sunikumar Patel, Akash Maheshwari, Roshni Jariwala Desai, Madhvan Nair, Daksha Patel, Sanjay Desai, Raj Gandhi, Usha Patel, Vinod Jayrambhai Patel and Mina Jariwala*, No. 01-24-0008-8964 (AAA 2024) (Unpaid Royalty Fees).

Other than as described above, no litigation is required to be disclosed in this Item.

Subject to the one exception below, neither we nor any of our affiliates will open and operate during the AOP Term, nor authorize any other party to open and operate during the AOP Term, any other Brand Hotel the physical premises of which are located within the Area of Protection. One exception to this restriction is that, during the AOP Term, if we or any affiliate acquires ownership of or the right to operate, manage, franchise or license (regardless of the form of transaction) another group of at least 4 hotels, one or more of which hotels are located or are under contract or construction to be located in the Area of Protection, then we and our affiliates will have the unrestricted right to convert, or cause to be converted, the acquired hotel(s) within the Area of Protection from its (or their) original trade identity to operate under the Proprietary Marks and the Hotel System. We then may operate, or authorize any other party to operate, those hotel(s) as Brand Hotel(s), even if one or more of the other acquired hotels, whether operating within or outside the Area of Protection, are not converted to Brand Hotels.

If the Hotel is an operating Brand Hotel, you may not receive any Area of Protection or AOP Term when signing the Franchise Agreement. We will make the determination of whether to provide any Area of Protection based on the time during which the Hotel has operated under the "Hyatt" or "The StandardX" name and the market conditions under which the Hotel operates.

Your rights in the Area of Protection apply only during the AOP Term. Following the AOP Term, you will have no territorial rights or protection, whether within or outside the Area of Protection, and we and our affiliates may open and operate, and authorize any other parties to open and operate, other Brand Hotels the physical premises of which are located within the Area of Protection, including under franchise applications submitted and/or franchise agreements and other agreements signed during the AOP Term. Because we and others may establish and operate one or more Brand Hotels and other Hyatt Network Hotels within the Area of Protection after the AOP Term expires, and during the AOP Term under the exception above, you will not receive an exclusive territory. You may face competition from other franchisees, from outlets we own, or from other channels of distribution or competitive brands that we control.

Question 59

Under what conditions is a The Standardx franchisee prohibited from using Guest Information in marketing, advertising, and promotional programs for the Hotel?

Accepted Answer

Subject to Hyatt's requirements and at Franchisee's expense, Franchisee may conduct local and regional marketing, advertising and promotional programs for the Hotel. Franchisee must ensure that all advertising, marketing and promotional materials, all public relations plans and programs, and all uses of the Proprietary Marks are conducted in a dignified manner and in accordance with the System Standards, including the use of Hyatt's standard templates where applicable, and which may, at Hyatt's option, require Hyatt's prior approval of materials not previously approved by Hyatt in the manner Hyatt specifies. Franchisee must discontinue using any materials, including previouslyapproved materials, and cease engaging in any plans and programs, including previously-approved plans and programs, within the timeframe Hyatt specifies after Franchisee receives written notice from Hyatt. Franchisee may not use Guest Information in conducting marketing, advertising and promotional programs for the Hotel unless conducted by or through Hyatt or with Hyatt's supervision in each instance. Franchisee shall pay Hyatt the reasonable fees that Hyatt periodically establishes for optional marketing, advertising and promotional materials and programs that Franchisee chooses to acquire from Hyatt or its Affiliates or in which Franchisee chooses to participate.

Source: Item 18 — OTHER INCOME (LOSS), NET (FDD pages 187–399)

Question 60

According to the FDD, what is the effective date for each amendment under ASU 2023-06 for The Standardx, assuming the SEC removes the related disclosure by June 30, 2027?

Accepted Answer

*Disclosure Improvements*—In October 2023, the FASB issued Accounting Standards Update No. 2023-06 ("ASU 2023-06"), *Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative*. ASU 2023-06 modifies the disclosure and presentation requirements for certain FASB Accounting Standards Codification topics to align with the SEC's regulation. The effective date for each amendment will be the date on which the SEC's removal of that related disclosure from its regulations becomes effective, if the SEC removes the disclosure by June 30, 2027. The provisions of ASU 2023-06 are to be applied prospectively, with early adoption prohibited. We do not expect the adoption of ASU 2023-06 to have a material impact on our consolidated financial statements and accompanying Notes.

Source: Item 23 — Receipts (FDD pages 85–132)

Question 61

According to The Standardx FDD, what happens if a court or arbitrator determines that the class-wide arbitration waiver is unenforceable?

Accepted Answer

Hyatt and Franchisee agree that arbitration will be conducted on an individual, not a class-wide, basis; that only Hyatt and Franchisee (and/or their respective Related Parties, as applicable) may be the parties to any arbitration proceedings described in this Section 14.1; and that an arbitration proceeding between Hyatt and Franchisee (and/or their respective Related Parties) may not be consolidated with any other arbitration proceeding between Hyatt and any other person or entity. Notwithstanding the foregoing or anything to the contrary in this Section 14.1 or Section 18.2, if any court or arbitrator determines that all or any part of the preceding sentence is unenforceable with respect to a dispute that otherwise would be subject to arbitration under this Section 14.1, then all parties agree that this arbitration clause shall not apply to that dispute and that such dispute shall be resolved in a judicial proceeding in accordance with this ARTICLE XIV (excluding this Section 14.1).

Source: Item 18 — OTHER INCOME (LOSS), NET (FDD pages 187–399)

Question 62

According to the FDD, can Hyatt Corporation provide System Services related to The Standardx to other Hyatt Network Hotels and other businesses, even if they compete with the Hotel?

Accepted Answer

|  | and may provide some or all of the System Services to other Hyatt Network Hotels and |
|---|---|
| other hotels, lodging facilities and other businesses, even if they compete with the Hotel. You will |  |
| have no right to pursue any claims, demands, or damages as a result of these activities, whether |  |
| under breach of contract, unfair competition, implied covenant of good faith and fair dealing, |
| divided loyalty, or other theories. |  |

Source: Item 13 — Trademarks (FDD pages 66–68)

Question 63

According to the Franchise Agreement, under what conditions will the fee for Services fluctuate monthly for The Standardx franchise?

Accepted Answer

The fee for the Services is a portion of and included in the System Services Charges (as defined in the Franchise Agreement). The fee for the Services will fluctuate monthly, subject to Section 6b of this Agreement.

Source: Item 18 — OTHER INCOME (LOSS), NET (FDD pages 187–399)

Question 64

According to the Hyatt Franchising, L.L.C. Multi-state Franchise Disclosure Document for The Standardx hotels, what triggers the applicability of the additional state-specific disclosures?

Accepted Answer

The following are additional disclosures to the Hyatt Franchising, L.L.C. Multi-state Franchise Disclosure Document for Brand Hotels required by various state franchise laws. Each provision of these additional disclosures will not apply unless, with respect to that provision, the jurisdictional requirements of the applicable state franchise registration and disclosure law are met independently without reference to these additional disclosures.

Source: Item 18 — OTHER INCOME (LOSS), NET (FDD pages 187–399)

The_Standardx 2025 FDD FAQ