What is the dependency related to the Guarantor Monetary Threshold for The Standardx franchise?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee must ensure that one or more of the Controlling Owners which Hyatt specifies as of the Effective Date signs Hyatt's Guaranty and Assumption of Obligations (the "Guaranty"), the current form of which is attached as Exhibit H. Franchisee represents and warrants that at least one Guarantor satisfies the Guarantor Monetary Threshold as of the Effective Date, and Franchisee agrees to ensure that at least one Guarantor continues to satisfy the Guarantor Monetary Threshold (as it may be increased in accordance with Exhibit B-1) at all times during the Term. Franchisee agrees to, and shall cause its Guarantors to, reasonably cooperate with Hyatt in connection with all auditing and reporting requirements that Hyatt reasonably specifies relating to the Guarantor Monetary Threshold.
In addition to and without limiting Hyatt's other rights and remedies under the Franchise Agreement, this Guaranty or applicable law, Guarantor acknowledges that Hyatt may terminate the Franchise Agreement (subject to the applicable notice and cure period in the Franchise Agreement) if at least one Guarantor or another guarantor of Franchisee's obligations under the Franchise Agreement does not satisfy the Guarantor Monetary Threshold at all times during the Franchise Agreement's term.
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 franchise agreement is dependent on meeting the Guarantor Monetary Threshold. Specifically, Hyatt requires that the franchisee ensures one or more controlling owners sign the Guaranty and Assumption of Obligations. The franchisee must also ensure that at least one guarantor satisfies the Guarantor Monetary Threshold as of the effective date and continues to meet it throughout the term of the agreement.
The Guarantor Monetary Threshold is subject to change, as it may be increased in accordance with Exhibit B-1 of the Franchise Agreement. The franchisee and its guarantors are expected to cooperate with Hyatt regarding auditing and reporting requirements related to this threshold.
If the Guarantor Monetary Threshold is not met at all times during the Franchise Agreement's term, Hyatt retains the right to terminate the Franchise Agreement, subject to applicable notice and cure periods. This condition underscores the importance of maintaining the required financial capacity of the guarantor to ensure the franchisee's compliance with the franchise agreement and to avoid potential termination.