Is a The Standardx franchisee required to participate in all System Services, and if not, what are the participation requirements?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
4.1 System Services. If Franchisee is in full compliance with its obligations under this Agreement, Hyatt or one or more members of the Hyatt Group will provide to Franchisee those System Services periodically specified by Hyatt for Brand Hotels. Franchisee must participate in all Mandatory Services and related programs, and may (at Franchisee's option) participate in any or all Non-Mandatory Services and related programs, in the manner that Hyatt periodically specifies. Hyatt may from time to time add to, delete from, and otherwise modify these System Services, and the scope of and manner of providing System Services, upon notice to Franchisee. Also, due to the differences in products, services, markets and hospitality experiences among Brand Hotels and other Hyatt Network Hotels, Hyatt may, where it deems appropriate in its judgment: (a) classify certain System Services as Mandatory Services under this Agreement which Hyatt classifies as Non-Mandatory Services or does not offer to other Brand Hotels and/or other Hyatt Network Hotels; (b) not provide to the Hotel certain System Services that Hyatt provides to other Brand Hotels and/or other Hyatt Network Hotels; and (c) limit the scope of those System Services provided to franchised Brand Hotels, including, by way of example and without limitation, by limiting the access that franchised Brand Hotels have to certain customer and other proprietary information for Hyatt Network Hotels other than the Hotel.
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 are not required to participate in all System Services. The FDD specifies that franchisees must participate in all Mandatory Services and related programs as defined by The Standardx. However, franchisees have the option to participate in any or all Non-Mandatory Services and related programs, according to their preference. The Standardx retains the right to modify these System Services, including adding to or deleting from them, with notice to the franchisee.
It is important to note that The Standardx has the discretion to classify System Services differently for various Brand Hotels, meaning that a service considered mandatory for one hotel might be non-mandatory or not offered at all to another. Additionally, The Standardx can limit the scope of System Services provided to franchised Brand Hotels, potentially restricting access to certain customer or proprietary information available to other hotels within the Hyatt Network.
Franchisees are responsible for paying System Services Charges, which represent their share of the System Services Costs attributable to the services in which they participate or are obligated to participate. These costs cover expenses incurred by the Hyatt Group in providing System Services. Understanding which services are mandatory and the associated costs is crucial for a prospective franchisee to accurately assess the financial obligations and operational requirements of a The Standardx franchise.