For The Standardx franchise, what is the dependency between transferring the Hotel's ownership and transferring the Franchise Agreement?
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.
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, 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. This means that if a franchisee decides to sell the hotel property or its assets, they must also transfer the rights and obligations of the franchise agreement to the new owner. This ensures that The Standardx maintains control over who operates the hotel under its brand and that the new operator is bound by the terms of the franchise agreement.
This requirement protects The Standardx's brand standards and reputation, as the franchisor can vet potential new franchisees and ensure they meet the company's operational and financial criteria. It also prevents a situation where a hotel is sold to an operator who is not approved by The Standardx, which could lead to a decline in service quality or brand consistency.
For a prospective The Standardx franchisee, this dependency means that selling the hotel involves a more complex process than simply selling a piece of real estate. The franchisee must find a buyer who is also acceptable to The Standardx as a franchisee and is willing to take on the obligations of the franchise agreement. Any transfer that does not comply with the terms and conditions outlined in Article XII of the agreement, including obtaining The Standardx's approval when required, constitutes a breach of the agreement.