Can The Standardx or its affiliates be designated as the required suppliers for the Hotel?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 40–45)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, The Standardx and its affiliates can be designated as required or approved suppliers for the hotel. The FDD specifies that franchisees must operate the hotel according to The Standardx's System Standards, which may regulate the types, models, and brands of products and services used, as well as designate approved suppliers, including The Standardx or its affiliates. This means that The Standardx has the authority to mandate that franchisees purchase certain goods and services from specific sources, which could include themselves or their affiliated companies.
The Standardx may also designate a particular source, model, or brand of FF&E (furniture, fixtures, and equipment), supplies, or other goods and services deemed critical to the hotel system. This allows The Standardx to maintain consistency and quality across all franchised locations. While franchisees can request approval for alternative suppliers, The Standardx may charge costs to review the request and evaluate the proposed product, service, or source. The approval may be conditional based on factors such as quality, warranties, prices, and service standards.
The FDD indicates that approximately 95% of the total purchases and leases required to establish and operate the hotel must be made from The Standardx, designated suppliers, or according to the System Standards. In 2024, The Standardx's affiliates collected about $1,249,833 in fees and other revenue from providing various products and services to Brand Hotel franchisees, not including revenue from System Services outlined in Item 6. This demonstrates the potential financial benefit The Standardx's affiliates derive from these supplier arrangements. Franchisees should carefully consider these requirements and the potential costs associated with purchasing from designated suppliers when evaluating the franchise opportunity.