On what basis does The Standardx's CODM evaluate performance?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Our CODM evaluates performance based on segment revenues and Adjusted EBITDA. Our CODM uses these measures to evaluate trends and assess segment operating performance as compared to our prior-period and forecasted results as well as our industry and competitors in order to determine how to allocate resources to each segment. Significant segment expenses include Adjusted general and administrative expenses, owned and leased expenses, and distribution expenses. Our CODM does not evaluate our operating segments using discrete asset information.
We define Adjusted EBITDA as net income (loss) attributable to Hyatt Hotels Corporation plus net income (loss) attributable to noncontrolling interests and our pro rata share of unconsolidated owned and leased hospitality ventures' Adjusted EBITDA, primarily based on our ownership percentage of each owned and leased venture, adjusted to exclude amortization of management and hotel services agreement and franchise agreement assets ("key money assets") and performance cure payments, which constitute payments to customers ("Contra revenue"); revenues for reimbursed costs; stock-based compensation expense; transaction and integration costs; depreciation and amortization; reimbursed costs that we intend to recover over the long term; equity earnings (losses) from unconsolidated hospitality ventures; interest expense; gains (losses) on sales of real estate and other; asset impairments; other income (loss), net; and benefit (provision) for income taxes.
Source: Item 1 — Financial Statements. (FDD pages 156–187)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the Chief Operating Decision Maker (CODM) assesses performance based on segment revenues and Adjusted EBITDA. The CODM, who is the President and Chief Executive Officer, utilizes these metrics to analyze trends and evaluate the operating performance of each segment. This evaluation involves comparing current performance against prior periods, forecasted results, industry benchmarks, and competitors.
The Standardx uses these comparisons to inform decisions about how to allocate resources across different segments of the business. Significant expenses considered in this evaluation include Adjusted general and administrative expenses, owned and leased expenses, and distribution expenses. However, the CODM does not use discrete asset information to evaluate the operating segments.
Adjusted EBITDA is defined as net income (loss) attributable to Hyatt Hotels Corporation plus net income (loss) attributable to noncontrolling interests and our pro rata share of unconsolidated owned and leased hospitality ventures' Adjusted EBITDA, primarily based on our ownership percentage of each owned and leased venture, adjusted to exclude amortization of management and hotel services agreement and franchise agreement assets and performance cure payments, which constitute payments to customers; revenues for reimbursed costs; stock-based compensation expense; transaction and integration costs; depreciation and amortization; reimbursed costs that we intend to recover over the long term; equity earnings (losses) from unconsolidated hospitality ventures; interest expense; gains (losses) on sales of real estate and other; asset impairments; other income (loss), net; and benefit (provision) for income taxes.
For a prospective franchisee, this means that The Standardx's financial performance and resource allocation are heavily influenced by segment revenues and Adjusted EBITDA. Understanding these metrics and how they are calculated is crucial for franchisees to gauge the overall health and strategic direction of the company. Franchisees should pay close attention to how these metrics are trending and how they compare to industry standards to assess the potential risks and opportunities associated with investing in The Standardx.