What is the duration of the franchise agreement term for The Standardx, assuming no early termination?
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 franchise agreement term is addressed in Article XIII, concerning successor franchise agreements. Specifically, Section 13.1 states that if a franchisee meets certain conditions upon the expiration of the current agreement, The Standardx will offer the franchisee the right to enter into a successor franchise agreement. This successor agreement allows the franchisee to continue operating the hotel as a Brand Hotel for a term that commences immediately after the expiration of the initial agreement and extends for ten years from that date. This ten-year term is referred to as the "Successor Franchise Right."
To be eligible for a successor franchise agreement with The Standardx, the franchisee must meet several requirements. These include substantial compliance with the existing agreement throughout its term, full compliance with all System Standards at the time of expiration, meeting The Standardx's then-current standards for franchisees, and receiving passing Quality Assurance Scores on all evaluations conducted during the three years preceding the agreement's expiration. Additionally, the franchisee must have the right to maintain possession of the hotel for at least ten years following the expiration of the current agreement.
If a franchisee fails to meet these requirements, The Standardx is not obligated to offer a successor franchise agreement. This applies regardless of whether The Standardx previously notified the franchisee of non-compliance or had the option to terminate the agreement during its initial term but chose not to exercise that right. Therefore, while a ten-year successor agreement is possible, it is contingent upon the franchisee's adherence to The Standardx's standards and requirements throughout the initial agreement's term.