What is The Standardx franchisee's obligation regarding reimbursement to Hyatt for expenses incurred in connection with a Proceeding covered by Section 8.3(d)?

According to The Standardx's 2025 Franchise Disclosure Document, franchisees are required to reimburse Hyatt for their proportionate share of reasonable expenses incurred in connection with certain legal proceedings. Specifically, Section 8.3(d) outlines that Hyatt has the right to defend and control the defense of any legal proceeding arising from a data breach, class action, or other proceeding involving both The Standardx Hotel and any other Brand Hotel or Hyatt Network Hotel, regardless of whether Hyatt or any other Hyatt Indemnified Parties are named as defendants.

The franchisee's obligation is to promptly reimburse Hyatt for the hotel's proportionate share of all reasonable expenses Hyatt incurs in these types of proceedings. Hyatt will allocate these expenses equitably among The Standardx Hotel and all other Brand Hotels and Hyatt Network Hotels involved in the proceeding, using a method that Hyatt reasonably determines.

This means that if a data breach or class action lawsuit affects multiple hotels within the Hyatt system, The Standardx franchisee could be responsible for covering a portion of the legal expenses incurred by Hyatt in defending against the claim. The exact amount the franchisee would have to pay depends on Hyatt's allocation, which is determined based on what Hyatt considers reasonable. This could potentially lead to significant and unforeseen costs for the franchisee, depending on the nature and scope of the legal proceeding.