What are the consequences if Hyatt denies the extension request for The Standardx's Opening Deadline?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee may request an extension of the Opening Deadline by submitting to Hyatt, at least three (3) months before the Opening Deadline, a written request for extension and an extension fee in the amount set forth in Exhibit B-1.
If Hyatt approves the extension, Hyatt will set a new Opening Deadline, the extension fee will be non-refundable, and Hyatt may (at its option) require Franchisee to modify any previously-approved plans, construction documents, or the PIP (as applicable), to comply with the then current design, equipment and other aspects of the Hotel System.
If Hyatt denies the extension, Hyatt will refund the extension fee.
Franchisee shall indemnify Hyatt for all costs and expenses that Hyatt incurs directly or indirectly as a result of Franchisee's failure to open the Hotel on or before the anticipated Opening Date specified by Franchisee or the Opening Deadline, whichever is earlier, including any amounts that Hyatt pays with respect to customers whose reservations at the Hotel are cancelled.
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, if Hyatt denies an extension request for the Opening Deadline, Hyatt will refund the extension fee. However, the franchisee is still responsible for opening the hotel by the original deadline.
If the franchisee fails to open The Standardx hotel by the anticipated Opening Date or the Opening Deadline, whichever is earlier, the franchisee must indemnify Hyatt for all costs and expenses Hyatt incurs. This includes any amounts Hyatt pays to customers whose reservations are canceled due to the delayed opening.
This means that failing to meet the opening deadline can result in significant financial liabilities for a The Standardx franchisee, as they would be responsible for covering Hyatt's costs and expenses related to the delay. Prospective franchisees should carefully consider their ability to meet the initial opening deadline and factor in potential costs associated with delays, even if an extension is requested.