How is the CapEx Account contribution determined for The Standardx franchise during the period beginning on the first anniversary of the Opening Month and lasting 12 months?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
In order to assist Franchisee in having funds available to make any necessary capital expenditures at the Hotel and comply with its obligations under this Section 4.7 (but without limiting those obligations), each month Franchisee shall deposit into a separate account that Franchisee controls (the "CapEx Account") the amount set forth in Exhibit B-1. Upon Hyatt's reasonable request, Franchisee will periodically provide Hyatt information concerning the funds in and expenditures from the CapEx Account. Franchisee shall use the funds in the CapEx Account only for the purpose of making approved capital expenditures and complying with its upgrade and
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, franchisees are required to deposit funds into a separate account called the "CapEx Account" to cover necessary capital expenditures at the hotel. The amount to be deposited each month is detailed in Exhibit B-1 of the Franchise Agreement. The funds in the CapEx Account are to be used for approved capital expenditures and to meet upgrade obligations.
However, the provided FDD excerpts do not specify the exact method for determining the CapEx Account contribution for The Standardx franchise, particularly for the 12-month period starting on the first anniversary of the Opening Month. While it mentions that the amount is "set forth in Exhibit B-1", the actual details of how this amount is calculated (e.g., as a percentage of revenue, a fixed sum, or based on a specific formula) are not included in the provided excerpts.
A prospective The Standardx franchisee should carefully review Exhibit B-1 of the Franchise Agreement to understand the precise calculation and requirements for the CapEx Account contributions. They should also inquire with The Standardx franchisor about any factors that could influence these contributions over time, such as hotel performance, renovation requirements, or changes in brand standards. Understanding these details is crucial for accurate financial planning and ensuring the franchisee can meet their obligations for maintaining and upgrading the hotel.