What does The Standardx Brand Hotel Franchise Agreement outline regarding the handling of confidential information?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Affiliates or the Hotel System, including digital passwords and identifications and any source code of, and data, reports, and other printed materials generated by, the software or other technology; (i) knowledge of the operating results and financial performance of Brand Hotels other than the Hotel; (j) graphic designs and related intellectual property; and (k) any negotiated
provisions of this Agreement (including any amendment to this Agreement) and any other difference between the terms of this Agreement (including any amendment to this Agreement) and the terms of the standard form of Franchise Agreement in the Brand Hotel franchise disclosure document. However, Confidential Information does not include information, knowledge, or knowhow that Franchisee can demonstrate lawfully came to its attention before Hyatt or its Affiliate provided it to Franchisee or its Affiliate directly or indirectly; that, at the time Hyatt or its Affiliate disclosed it to Franchisee, already had lawfully become generally known in the hotel industry through publication or communication by others (without violating an obligation to Hyatt or its Affiliate); or that, after Hyatt or its Affiliate disclose it to Franchisee, lawfully becomes generally known in the hotel industry through publication or communication by others (without violating an obligation to Hyatt or its Affiliate). If Hyatt includes any matter in Confidential Information, anyone who claims that it is not Confidential Information must prove that one of the exclusions provided in the preceding sentence is satisfied.
"Consequential Termination" means termination of this Agreement if (a) such termination involves a transfer of the Hotel or its assets, or a Controlling Ownership Interest in Franchisee or its Controlling Owner, to a Competitor or (b) there are three (3) or more franchise agreements (including this Agreement) with Franchisee or its Affiliates for hotels of the Hotel Type that Hyatt (or its Affiliate) terminates because of Franchisee's (or its Affiliates') default or that Franchisee (or its Affiliate(s)) terminates in breach of the applicable agreement. For purposes of this definition, a "Competitor" is any entity that owns, franchises and/or manages, or is an affiliate of any entity that owns, franchises and/or manages, a hotel brand, trade name or service mark for a system of at least four (4) hotels with an average daily room rate for all or substantially all of the hotels in the U.S. during the then most recent full calendar year that is at least sixty percent (60%) of the average daily room rate for Brand Hotels operating in the U.S.
"Control Transfer" means any transfer (as defined in this Exhibit A) of (a) this Agreement (or any interest in this Agreement), (b) the Hotel or all or substantially all of its assets, (c) a Controlling Ownership Interest in Franchisee, whether in one transaction or a series of related transactions (regardless of the time period over which these transactions take place), or (d) a Controlling Ownership Interest in any Controlling Owner (if such Owner is a legal entity), whether in one transaction or a series of related transactions (regardless of the time period over which these transactions take place).
"Controlling Owner" means an individual or legal entity holding a direct or indirect Controlling Ownership Interest in Franchisee.
Source: Item 18 — OTHER INCOME (LOSS), NET (FDD pages 187–399)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the Franchise Agreement defines what constitutes "Confidential Information" and outlines the franchisee's obligations regarding its use and protection. The agreement specifies numerous items considered confidential, including site selection criteria, hotel design and construction standards, training and operations materials, methods, sales and marketing techniques, guest information, knowledge of FF&E suppliers, technology systems, operating results of other Brand Hotels, graphic designs, and negotiated provisions of the agreement.
The Standardx agreement also clarifies that information is not considered confidential if the franchisee can prove it was already known to them, was publicly available in the hotel industry without violating any obligations, or becomes publicly known after disclosure without any breach of obligation. This places the burden of proof on the franchisee to demonstrate that any of these exclusions apply.
Furthermore, the Franchise Agreement stipulates that even after the agreement terminates or a transfer occurs, the franchisee and their transferring owners must not use any Proprietary Mark, Copyrighted Materials, or Confidential Information, unless explicitly permitted by another agreement with Hyatt or its affiliates. This restriction ensures that confidential information remains protected even after the franchisee's relationship with The Standardx ends. The management company operating the hotel also agrees to be bound by the confidentiality terms outlined in the Franchise Agreement.