What is the duration of the franchise agreement term for The Standardx?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
When this Agreement expires, if Franchisee (and, as applicable, each Guarantor): (a) has substantially complied with this Agreement during its Term and is in full compliance with this Agreement (including all System Standards) as of the date upon which this Agreement expires; (b) then meets Hyatt's then applicable standards for franchisees and owners of franchisees of Brand Hotels; (c) has received passing Quality Assurance Scores (as defined in the System Standards) on all evaluations conducted during the preceding three (3)-year period; and (d) has the right to maintain possession of the Hotel for at least ten (10) years following this Agreement's expiration, then Hyatt will offer Franchisee the right to enter into a successor franchise agreement to continue operating the Hotel as a Brand Hotel for a term commencing immediately upon the expiration of this Agreement and expiring ten (10) years from that date (the "Successor Franchise Right") in accordance with this ARTICLE XIII.
If Franchisee (or any Guarantor) does not meet the requirements of this Section 13.1, then Hyatt need not enter into a successor franchise agreement with Franchisee, whether or not Hyatt notified Franchisee of the non-compliance or had, or chose to exercise, the right to terminate this Agreement during its 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 standard franchise agreement term is not explicitly stated. However, the document does state that if a franchisee meets certain requirements upon expiration of the current agreement, The Standardx will offer the franchisee the right to enter into a successor franchise agreement to continue operating the Hotel as a Brand Hotel for a term commencing immediately upon the expiration of this Agreement and expiring ten (10) years from that date.
To be eligible for a successor franchise agreement, the franchisee must have substantially complied with the existing agreement during its term, be in full compliance with all System Standards as of the expiration date, meet The Standardx's then-applicable standards for franchisees, and have received passing Quality Assurance Scores on all evaluations conducted during the preceding three-year period. Additionally, the franchisee must have the right to maintain possession of the hotel for at least ten years following the agreement's expiration.
If a franchisee fails to meet these requirements, The Standardx is not obligated to offer a successor franchise agreement. For prospective franchisees, it is important to clarify the initial term length of the franchise agreement with The Standardx, as this detail is not provided in the excerpt. Understanding the initial term and the conditions for renewal is crucial for long-term business planning.