Can a Franchisee enter into a Management Arrangement for The Standardx Hotel without Hyatt's approval?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
4.2 Management of the Hotel.
- (a) Franchisee or Management Company as Manager. Either a Management Company that Hyatt approves in writing or Franchisee (if Hyatt approves Franchisee to manage the Hotel) must at all times retain and exercise direct management control over all aspects of the Hotel's business and must be the employer of the Hotel's Core Management and other personnel, except for any members of Core Management that are overseen by an F&B Operator whom Hyatt approves. At Hyatt's option, before any of the Hotel's Core Management are engaged, Franchisee must submit to Hyatt the identity and qualifications of the proposed candidates. These personnel must be in place and working on behalf of the Hotel by the time period Hyatt specifies. Franchisee may not enter into a Management Arrangement without Hyatt's prior written approval of the Management Company, and Franchisee may not itself manage the Hotel without Hyatt's approval of Franchisee as the Hotel's operator. Hyatt will not unreasonably withhold its approval if the Management Company or Franchisee (as applicable) meets Hyatt's minimum qualifications, including Hyatt's then current operator approval fee, and ensures that its personnel attend and satisfactorily complete required brand standard training programs.
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 franchisee cannot enter into a Management Arrangement without prior written approval from Hyatt. Section 4.2(a) specifies that either a Management Company approved by Hyatt in writing or the Franchisee themselves (if approved by Hyatt) must retain direct management control over the hotel's business.
This requirement ensures that The Standardx maintains consistent brand standards and operational quality across all franchised locations. Hyatt's approval process includes verifying that the Management Company or Franchisee meets minimum qualifications and ensures personnel complete required brand standard training programs. Hyatt also has the right to review the identity and qualifications of the Hotel's Core Management before they are engaged.
If a franchisee violates this requirement and enters into an unapproved management arrangement, Hyatt has the right to revoke its approval of the Management Company or of Franchisee as manager. If Hyatt revokes its approval, the franchisee must terminate the Management Arrangement and either assume direct control of the Hotel's management and operation, if Hyatt approves Franchisee to manage the Hotel, or engage another Management Company that Hyatt has approved in writing. This protects Hyatt's brand standards and ensures that all The Standardx hotels are managed by qualified operators.
This approval process is typical in the hotel franchising industry, where maintaining brand consistency and service standards is crucial for success. Prospective The Standardx franchisees should carefully review Hyatt's requirements for Management Company approval and factor in the time and potential costs associated with this process when planning their hotel's operations.