For The Standardx franchise, what is considered a transfer that requires compliance with Article XII?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Accordingly, unless otherwise specified in this ARTICLE XII, neither this Agreement (or any interest in this Agreement), the Hotel or substantially all of its assets, nor any ownership interest in Franchisee or any Owner (if such Owner is a legal entity) may be transferred (as defined in Exhibit A) without complying with the terms and conditions applicable to such transfer in this ARTICLE XII.
A transfer of the Hotel's ownership, possession, or control, or substantially all of its assets, may be made only with a transfer of this Agreement.
Any transfer without complying with the terms and conditions applicable to such transfer in this ARTICLE XII, including Hyatt's approval (where such approval is required under this Agreement), is a breach of this Agreement.
- 12.3 Non-Control Transfers.
Subject to the other provisions of this ARTICLE XII, Franchisee and/or any of its Owners may consummate any Non-Control Transfers, without seeking or receiving Hyatt's consent, if (a) neither the proposed transferee nor any of its direct and indirect owners (if the transferee is a legal entity), other than a Public Owner, is a Competing Brand Owner or Sanctioned Person; and (b) such transfer does not, whether in one transaction or a series of related transactions (regardless of the time period over which these transactions take place), result in the transfer or creation of a direct or indirect Controlling Ownership Interest in Franchisee.
Within thirty (30) days after the effective date of any Non-Control Transfer (other than transfers among then-existing Owners), Franchisee shall provide Hyatt an updated Exhibit G (if the previously effective version of Exhibit G has changed) or such other information as Hyatt reasonably requests from time to time concerning any new Non-Controlling Owners (other than Limited Interest Owners).
- 12.4 Control Transfers.
Franchisee must notify Hyatt in writing at least ten (10) days in advance of Franchisee's listing the Hotel or a direct or indirect Controlling Ownership Interest in Franchisee for sale and promptly send Hyatt all information that Hyatt reasonably requests regarding any proposed sale.
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, Article XII outlines the requirements for ownership and transfer of the franchise. Unless specified otherwise within Article XII, any transfer of the franchise agreement itself, any interest in the agreement, the hotel or substantially all of its assets, or any ownership interest in the franchisee or any owner (if the owner is a legal entity) is subject to the terms and conditions outlined in Article XII. This broad definition ensures that any significant change in ownership or control of the The Standardx hotel franchise adheres to the franchisor's stipulations.
The FDD emphasizes that a transfer of the hotel's ownership, possession, or control, or substantially all of its assets, can only occur alongside a transfer of the franchise agreement. Any transfer that does not comply with the terms and conditions of Article XII, including obtaining The Standardx's approval when required, constitutes a breach of the franchise agreement. This provision underscores the importance of adhering to the franchisor's transfer protocols to maintain compliance and avoid potential legal repercussions.
The Standardx distinguishes between Non-Control Transfers and Control Transfers, each with its own set of requirements. Non-Control Transfers can be consummated without The Standardx's consent if the transferee is not a Competing Brand Owner or Sanctioned Person, and the transfer does not result in a Controlling Ownership Interest in the franchisee. However, The Standardx must be notified within thirty days of any Non-Control Transfer (excluding transfers among existing owners) and provided with updated ownership information. For Control Transfers, the franchisee must notify The Standardx in writing at least ten days before listing the hotel or a Controlling Ownership Interest for sale and provide all requested information regarding the proposed sale. These stipulations allow The Standardx to maintain oversight and ensure that any changes in ownership align with their brand standards and strategic objectives.