In the context of The Standardx franchise, what is the impact of a 'suspension of operations' on the calculation of 'Average Monthly Revenue'?

According to The Standardx's 2025 Franchise Disclosure Document, a 'suspension of operations' can impact the calculation of 'Average Monthly Revenue.' Specifically, if the Average Monthly Revenues have been materially and negatively impacted during the preceding twelve full calendar month period by a disruption in Hotel operations resulting from a suspension of operations, the Average Monthly Revenue will be determined by referencing the most recent twelve full calendar month period preceding termination during which the Hotel performance was not so impacted.

This means that if a The Standardx hotel experiences a suspension of operations that significantly reduces its revenue, the calculation of Average Monthly Revenue will not be based on that period of reduced performance. Instead, the calculation will revert to a prior 12-month period when the hotel's performance was not affected by such disruptions. This adjustment aims to provide a more accurate representation of the hotel's typical revenue-generating capacity.

For a prospective The Standardx franchisee, this provision offers a degree of protection. If unforeseen circumstances lead to a suspension of operations and a subsequent dip in revenue, the franchisee's financial obligations or any calculations tied to Average Monthly Revenue (such as liquidated damages) will be based on a more representative period of normal operation. This can be particularly beneficial in situations where factors beyond the franchisee's control temporarily hinder the hotel's performance. However, it is important to note that this adjustment only applies if the impact is deemed 'material and negative,' so minor disruptions may not trigger this recalculation.