For The Standardx franchise, what is the requirement regarding the Guaranty and Assumption of Obligations?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Guaranty. Franchisee must ensure that one or more of the Controlling Owners which Hyatt specifies as of the Effective Date signs Hyatt's Guaranty and Assumption of Obligations (the "Guaranty"), the current form of which is attached as Exhibit H. Franchisee represents and warrants that at least one Guarantor satisfies the Guarantor Monetary Threshold as of the Effective Date, and Franchisee agrees to ensure that at least one Guarantor continues to satisfy the Guarantor Monetary Threshold (as it may be increased in accordance with Exhibit B-1) at all times during the Term. Franchisee agrees to, and shall cause its Guarantors to, reasonably cooperate with Hyatt in connection with all auditing and reporting requirements that Hyatt reasonably specifies relating to the Guarantor Monetary Threshold.
The "Guarantor Monetary Threshold" means each of the following: (a) the amount of total assets less total liabilities (excluding Hotel assets and liabilities relating solely to the Hotel), each as calculated in accordance with U.S. generally accepted accounting principles, equal to or exceeding ________________ Dollars ($) as of the date hereof; and (b) liquid assets (consisting of cash, cash equivalents and marketable securities) equal to or exceeding ________________ Dollars ($) as of the date hereof.
Each dollar amount in this Section 4 shall increase automatically each year, without notice from Hyatt, 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.
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, franchisees must ensure that one or more Controlling Owners, as specified by The Standardx, sign the Guaranty and Assumption of Obligations. The current form of this guaranty is included as Exhibit H in the FDD. This guaranty ensures that at least one guarantor meets a specific financial threshold, referred to as the Guarantor Monetary Threshold, as of the Effective Date of the franchise agreement.
The Standardx requires that at least one guarantor continues to meet the Guarantor Monetary Threshold throughout the term of the agreement. This threshold may increase according to Exhibit B-1. Franchisees and their guarantors must cooperate with The Standardx regarding all auditing and reporting requirements related to this Guarantor Monetary Threshold.
The Guarantor Monetary Threshold is defined as (a) the amount of total assets less total liabilities (excluding Hotel assets and liabilities relating solely to the Hotel), each as calculated in accordance with U.S. generally accepted accounting principles, equal to or exceeding a certain dollar amount as of the date of signing the Guaranty and (b) liquid assets (consisting of cash, cash equivalents and marketable securities) equal to or exceeding a certain dollar amount as of the date of signing the Guaranty. Each dollar amount in this Section 4 shall increase automatically each year, without notice from Hyatt, 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.