Does The Standardx franchise agreement confer any goodwill or other interests in the Proprietary Marks, Copyrighted Materials, or Confidential Information upon the franchisee?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee's right to use the Proprietary Marks, Copyrighted Materials, and Confidential Information is derived only from this Agreement and is limited to Franchisee's developing and operating the Hotel according to this Agreement and all System Standards that Hyatt prescribes during the Term. Franchisee's unauthorized use of the Proprietary Marks, Copyrighted Materials, or Confidential Information is a breach of this Agreement and infringes Hyatt's and its Affiliate's rights in them. Franchisee's use of the Proprietary Marks, Copyrighted Materials, and Confidential Information and any goodwill established by that use are exclusively for Hyatt's and its Affiliate's benefit, and this Agreement does not confer any goodwill or other interests in the Proprietary Marks, Copyrighted Materials or Confidential Information upon Franchisee, other than the right to develop and operate the Hotel under this Agreement. Franchisee may not at any time during or after the Term contest or assist any other person or entity in contesting the validity, or Hyatt's and its Affiliate's ownership, of any of the Proprietary Marks, Copyrighted Materials, or Confidential Information.
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 does not confer any goodwill or other interests in the Proprietary Marks, Copyrighted Materials, or Confidential Information to the franchisee. The agreement states that the franchisee's right to use these items is derived solely from the franchise agreement and is limited to developing and operating the hotel according to the agreement and system standards. Any unauthorized use by the franchisee is considered a breach of the agreement and an infringement of The Standardx's rights.
The agreement explicitly states that the franchisee's use of the Proprietary Marks, Copyrighted Materials, and Confidential Information, along with any goodwill established through that use, are exclusively for the benefit of The Standardx and its affiliates. The agreement clarifies that it does not grant the franchisee any goodwill or other interests in these items, other than the right to develop and operate the hotel under the terms of the agreement.
Furthermore, the franchisee is prohibited from contesting the validity or The Standardx's ownership of the Proprietary Marks, Copyrighted Materials, or Confidential Information during and after the term of the agreement. This provision reinforces The Standardx's ownership and control over these assets and prevents the franchisee from claiming any rights or interests in them. This is a fairly standard clause in franchise agreements, as the brand wants to protect its intellectual property.