What are The Standardx franchisee's obligations regarding auditing and reporting requirements related to the Guarantor Monetary Threshold?
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.
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, the franchisee has specific obligations related to the Guarantor Monetary Threshold. The franchisee must ensure that at least one guarantor satisfies the Guarantor Monetary Threshold as of the Effective Date of the franchise agreement. Furthermore, the franchisee is obligated to ensure that at least one guarantor continues to meet this threshold throughout the entire term of the agreement, as the threshold may increase according to Exhibit B-1.
To ensure compliance, The Standardx franchisee must ensure that their guarantors reasonably cooperate with The Standardx in all auditing and reporting requirements that The Standardx reasonably specifies. This cooperation is essential for The Standardx to verify that the guarantor continues to meet the required monetary threshold.
In practical terms, this means that a prospective The Standardx franchisee needs to select a guarantor carefully and be prepared to provide ongoing financial documentation and access for audits as required by The Standardx. Failure to comply with these auditing and reporting requirements, or failure to maintain the required Guarantor Monetary Threshold, could potentially result in a breach of the franchise agreement.