What costs are covered by the funds designated for the Loyalty Program obligations for The Standardx?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Currently, the Hyatt Group deposits all funds that it collects for the Loyalty Program (including sales of points and other related fees) into segregated accounts and invests a portion of the funds in various investment securities (primarily fixed income) that independent investment managers manage. These funds are designated to fund the Loyalty Program obligations, including all marketing and administrative costs, and current and future award redemptions. The Hyatt Group may periodically change the method of funding the Loyalty Program, the assessment methodology and other program attributes. An independent accounting firm audits the Loyalty Program on an annual basis and we will make copies of the audit reports available upon request. We may periodically change the assessment methodology and other program attributes in the future.
Source: Item 6 — Other Fees (FDD pages 20–36)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the funds collected for the World of Hyatt Loyalty Program are used to cover specific obligations. These obligations encompass all marketing and administrative costs associated with the program. Additionally, the funds are used to cover both current and future award redemptions within the loyalty program.
The Hyatt Group manages these funds by depositing them into segregated accounts. A portion of these funds is then invested in various investment securities, primarily fixed income, which are managed by independent investment managers. This investment strategy aims to ensure the availability of funds to meet the program's obligations.
The FDD also mentions that the Hyatt Group has the right to periodically change the method of funding the Loyalty Program, the assessment methodology, and other program attributes. To ensure transparency and accountability, an independent accounting firm audits the Loyalty Program annually, and The Standardx will make copies of the audit reports available upon request.