In a The Standardx franchise transfer, what options does Hyatt have regarding the franchise agreement signed by the transferee or franchisee, including the term length and potential differences from the original agreement?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) the transferee and its owners (if the transfer is of this Agreement), or Franchisee and its Owners (if the transfer is of a Controlling Ownership Interest in Franchisee or one of its Controlling Owners), at Hyatt's option, either sign: (i) Hyatt's then current form of franchise agreement and related documents for use with existing Brand Hotels (including guarantees and assumptions of obligations), any and all of the provisions of which may differ materially from any and all of those contained in this Agreement, including the Royalty Fee and System Services Charges, and the term of which franchise agreement will be, at Hyatt's option, either twenty (20) years or the remaining unexpired portion of the Term; or (ii) the agreements and related documents (including guarantees and assumptions of obligations) that Hyatt then specifies under which they assume (or confirm the continued effectiveness of) all of Franchisee's rights and obligations under 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, in the event of a franchise transfer, Hyatt, the franchisor, has options regarding the franchise agreement. Hyatt can choose whether the transferee or franchisee signs either Hyatt's then-current form of franchise agreement or an agreement assuming the existing franchise agreement.
If Hyatt opts for the new franchise agreement, its provisions may differ significantly from the original agreement, potentially including changes to the Royalty Fee and System Services Charges. The term of this new franchise agreement will be at Hyatt's discretion, either twenty years or the remaining unexpired portion of the original term.
Alternatively, Hyatt can specify that the transferee or franchisee assumes all rights and obligations under the existing franchise agreement. This decision rests solely with Hyatt, giving them considerable control over the terms governing the franchise after the transfer. This ensures The Standardx maintains brand standards and operational consistency.