What constitutes a 'Flag Change' that would automatically terminate The Standardx agreement?

According to The Standardx's 2025 Franchise Disclosure Document, a 'Flag Change' will automatically terminate the franchise agreement. A 'Flag Change' is defined as any termination of The Standardx's franchise relationship with the owner. It also includes any change that results in the property no longer being under a management, franchise, or similar agreement with a direct or indirect subsidiary of Hyatt Hotels Corporation.

This means that if the franchisee's relationship with The Standardx is terminated for any reason, or if the hotel ceases to be managed or franchised by The Standardx or its affiliates, the franchise agreement is automatically terminated. This provision protects The Standardx by ensuring that the hotel continues to operate under its brand standards and management, or that the relationship is fully terminated.

For a prospective franchisee, this clause highlights the importance of maintaining a good relationship with The Standardx and adhering to the terms of the franchise agreement. Failure to do so could result in the automatic termination of the agreement due to a 'Flag Change'. It also means the franchisee cannot simply switch to another hotel brand without triggering this termination clause. The franchisee should seek clarification from The Standardx regarding specific scenarios that could lead to a 'Flag Change' to fully understand the implications of this provision.