How does the Application Fee in Item 5 relate to the ongoing fees described in Item 6 for The Standardx?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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 |
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the Application Fee is an initial fee described in Item 5, while Item 6 details the ongoing fees franchisees will pay. The Application Fee for a Brand Hotel with 125 to 300 guest rooms ranges from $95,000 to $145,000, payable in a lump sum upon signing the franchise application. This fee is distinct from the ongoing fees outlined in Item 6, which cover various operational and service-related expenses. Item 5 also mentions other initial fees such as the Comfort letter fee, Alternative Design Review Fee, and Extension of opening deadline, none of which are refundable except for the Application Fee and Extension Fee under certain conditions.
Item 6 categorizes ongoing fees into three groups: fees specified in the Franchise Agreement, fees for Mandatory System Services, and fees for Non-Mandatory System Services. These fees are typically paid to The Standardx or Hyatt Corporation. Examples of ongoing fees include the Global Property Guest Services (GPGS) Add-On Program, which varies depending on services selected and is currently $3.50 to $16 per service interaction, and the Digital Ancillary Services Program, which is currently $1,250 per month plus a commission of 5% of net revenue from bookings through the vendor's channels. These ongoing fees cover a range of services and support provided by The Standardx and its affiliates, and are separate from the initial Application Fee.
In summary, the Application Fee is a one-time initial fee paid upfront, whereas the fees in Item 6 are recurring expenses related to the ongoing operation of the The Standardx hotel. The FDD specifies that the Application Fee is potentially refundable under certain conditions, while most ongoing fees are non-refundable. Prospective franchisees should carefully review both Item 5 and Item 6 to understand the full scope of initial and ongoing financial obligations associated with operating a The Standardx franchise.