What was The Standardx's estimated fair value of its guarantees at March 31, 2025?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Guarantee Liabilities Fair Value—We estimated the fair value of our guarantees to be $220 million and $213 million at March 31, 2025 and December 31, 2024, respectively. Based on the lack of available market data, we have classified our guarantees as Level Three in the fair value hierarchy.
Contingent Consideration Fair Value—As part of acquisitions, we have entered into various contingent consideration arrangements. At March 31, 2025, we had $356 million of potential future consideration remaining under these arrangements. However, we are unable to reasonably estimate our maximum potential future consideration remaining related to the Bahia Principe Transaction (see Note 6).
Source: Item 1 — Financial Statements. (FDD pages 156–187)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the estimated fair value of its guarantees was $220 million as of March 31, 2025. This valuation is classified as Level Three in the fair value hierarchy due to the lack of available market data. In comparison, the estimated fair value of these guarantees was $213 million on December 31, 2024.
The guarantees are related to the UVC Transaction, and The Standardx may be obligated to fund up to $146 million related to certain guarantees. As of March 31, 2025, the company had $62 million of guarantee liabilities recorded in other long-term liabilities on its condensed consolidated balance sheets associated with these guarantees.
It's important to note that these valuations are based on estimates and assumptions, and the actual amounts could differ. The classification as Level Three indicates that these estimates rely heavily on the company's own assumptions and judgment due to the absence of readily available market data. Prospective franchisees should be aware of these potential financial obligations and how they might impact The Standardx's overall financial health.