What is the definition of 'Loan Documents' in the context of The Standardx Comfort Letter?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
r (together with the other loan documents evidencing or securing such indebtedness, as amended, restated or otherwise modified from time to time, the "Loan Documents") and (2) that the loan proceeds will be used for the direct benefit of the Hotel. Franchisee and Lender have requested that Hyatt enter into this letter agreement (this "Comfort Letter"). Franchisee or Lender shall pay to Hyatt a fee in the amount of Two Thousand Five Hundred Dollars ($2,500) in connection with this Comfort Letter, prior to or simultaneous with its execution. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Franchise Agreement.
Hyatt, Franchisee, and Lender agree as follows:
- While Lender has a valid first mortgage on the Hotel during the term of the Franchise Agreement, Hyatt agrees to use commercially reasonable efforts to (a) give Lender thirty (30) days prior written notice of any voluntary surrender by Franchisee of the Franchise (to the extent that Hyatt is aware in advance of any such voluntary surrender) and (b) furnish Lender with copies of default notices sent by Hyatt to Franchisee. In the event of a default by Franchisee under the Franchise Agreement Hyatt shall allow Lender thi
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, the Loan Documents are defined within the context of a Comfort Letter agreement between the franchisee, the lender, and Hyatt. The Loan Documents refer to the promissory note made by the franchisee in favor of the lender, along with any other loan-related documents that evidence or secure the franchisee's indebtedness to the lender. These documents may be amended, restated, or modified over time.
The Comfort Letter is an agreement requested by both the franchisee and the lender, and it requires a fee of $2,500 to be paid to Hyatt prior to or during its execution. This letter outlines certain agreements between Hyatt and the lender, particularly concerning the lender's mortgage on the hotel property. The Comfort Letter ensures that the lender receives notices of default and has opportunities to cure them, subject to certain limitations and conditions.
For a prospective The Standardx franchisee, understanding the definition of Loan Documents is crucial because it clarifies the scope of the lender's security interest in the hotel. It also highlights the importance of the Comfort Letter, which provides certain protections and obligations for both the lender and The Standardx (Hyatt) during the term of the franchise agreement. The franchisee should be aware of the fees associated with the Comfort Letter and the conditions under which the lender can exercise its rights and remedies related to the Loan Documents.