For The Standardx franchise, is the 'Average Monthly Revenue' calculation impacted by a renovation of the Hotel?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the foregoing, if "Average Monthly Revenues" as determined pursuant to any part of (a) through (c) above has been materially and negatively impacted during the preceding twelve (12) full calendar month period by a disruption in Hotel operations resulting from Force Majeure, casualty, suspension of operations (whether or not consented to by Hyatt), renovation of the Hotel, or any other similar circumstances, "Average Monthly Revenue" shall be determined by reference to the most recent twelve (12) full calendar month period preceding termination during which the Hotel performance was not so impacted.
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 calculation of 'Average Monthly Revenues' can be affected by a renovation of the hotel. Specifically, if a renovation materially and negatively impacts the hotel's operations during the twelve months preceding termination, the 'Average Monthly Revenue' will be determined using the most recent twelve-month period before the impact occurred. This adjustment ensures that the calculation reflects a more accurate representation of the hotel's potential revenue under normal operating conditions.
This provision protects both The Standardx and the franchisee by preventing skewed calculations due to temporary disruptions. For instance, if a hotel undergoes a major renovation that temporarily reduces occupancy and revenue, using the affected period to calculate liquidated damages could unfairly penalize the franchisee. Conversely, using a period unaffected by renovations provides a fairer basis for determining potential losses.
For a prospective The Standardx franchisee, this clause offers some financial security. It ensures that temporary setbacks due to renovations or other unforeseen circumstances will not disproportionately affect financial obligations or termination fees. Franchisees should carefully document any operational disruptions and their financial impacts to ensure accurate revenue calculations if needed. This also highlights the importance of maintaining thorough records and communicating openly with The Standardx regarding any factors that could affect revenue performance.