What costs were previously included in The Standardx's Adjusted EBITDA calculation but are now excluded?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
During the year ended December 31, 2024, we revised our definition of Adjusted EBITDA to exclude transaction and integration costs (see Note 1), and we recast prior-period results to provide comparability. The revised definition excludes integration costs, which were previously recognized in integration costs during the three months ended March 31, 2024 and general and administrative expenses during the years ended December 31, 2023 and December 31, 2022, and transaction costs, which were previously recognized in general and administrative expenses during the three months ended March 31, 2024 and the years ended December 31, 2023 and December 31, 2022. Previously, only transaction costs recognized in gains (losses) on sales of real estate and other and other income (loss), net were excluded from Adjusted EBITDA. As these costs may vary in frequency or magnitude, we believe the revised definition presents a more representative measure of our core operations, assists
in the comparability of results, and provides information consistent with how our management evaluates operating performance.
Source: Item 10 — OTHER ASSETS (FDD pages 132–156)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the company revised its definition of Adjusted EBITDA during the year ended December 31, 2024. This revision led to the exclusion of specific costs that were previously included in the calculation. The change was made to improve the comparability of results and to provide a more representative measure of the company's core operations, aligning with how management evaluates operating performance.
Specifically, the costs now excluded from The Standardx's Adjusted EBITDA calculation are transaction and integration costs. These costs were previously recognized in two different expense categories: integration costs and general and administrative expenses. Integration costs were recognized as such during the three months ended March 31, 2024, while general and administrative expenses included these costs during the years ended December 31, 2023, and December 31, 2022. Transaction costs also fell under general and administrative expenses during the three months ended March 31, 2024, and the years ended December 31, 2023, and December 31, 2022.
Previously, The Standardx only excluded transaction costs recognized in gains (losses) on sales of real estate and other and other income (loss), net from Adjusted EBITDA. The decision to exclude all transaction and integration costs reflects a move towards a clearer representation of core operational performance, as these costs can vary significantly in frequency or amount. For a prospective franchisee, this change in calculation methodology means that The Standardx's reported Adjusted EBITDA for previous periods has been recast to allow for a more accurate comparison with current performance, excluding these variable costs.