For The Standardx franchise, how is the CPI Increase calculated?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
The Guarantor Monetary Threshold will increase automatically each year of the Franchise Agreement's term, without notice from us, effective on the first day of the calendar month during which the Franchise Agreement's effective date falls, by an amount equal to the CPI Increase.
The "CPI Increase" means the amount to be adjusted multiplied by a fraction, the numerator of which is the Consumer Price Index for All Urban Consumers for All Items, which the U.S. Department of Labor, Bureau of Labor Statistics publishes (the "Base Index") as of the first day of the calendar month during which the increase is to take effect, and the denominator of which is the Base Index in effect on the Franchise Agreement's effective date or used for the most recent increase (whichever is later).
If the Base Index is no longer published, we may designate another reasonably comparable index for calculating changes in the cost of living or purchasing power for consumers.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 71–74)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the CPI Increase is used to adjust the Guarantor Monetary Threshold each year of the Franchise Agreement's term. This adjustment happens automatically, without notice from The Standardx, and takes effect on the first day of the calendar month during which the Franchise Agreement's effective date falls.
The CPI Increase is calculated by multiplying the amount to be adjusted by a fraction. The numerator of this fraction is the Consumer Price Index for All Urban Consumers for All Items (the "Base Index"), published by the U.S. Department of Labor, Bureau of Labor Statistics, as of the first day of the calendar month during which the increase is to take effect. The denominator is the Base Index in effect on the Franchise Agreement's effective date or used for the most recent increase, whichever is later.
If the Base Index is no longer published, The Standardx has the right to designate another reasonably comparable index for calculating changes in the cost of living or purchasing power for consumers. This ensures that the Guarantor Monetary Threshold remains aligned with economic realities even if the original index becomes unavailable. For a prospective franchisee, this means the financial requirements of the guaranty will likely increase over time, reflecting inflation and changes in the cost of living.