In which geographic locations is The Standardx primarily the employer of hotel employees under certain management agreements?

According to The Standardx's 2025 Franchise Disclosure Document, under certain management agreements, The Standardx acts as the employer of hotel employees primarily within the United States. When The Standardx is the employer, it is reimbursed for the costs incurred related to these employee management services without any added margin. These reimbursements are recognized over time as services are rendered and are recorded as revenues for reimbursed costs on the company's consolidated statements of income.

In this arrangement, The Standardx has discretion over how the employee management services are provided and is therefore considered the principal in these transactions. This means The Standardx is responsible for managing the employees and ensuring the services are delivered according to the management agreements. The costs for which The Standardx is reimbursed primarily relate to payroll expenses at the managed properties.

For a prospective franchisee, this arrangement means that if they enter into a management agreement with The Standardx in the U.S., The Standardx may act as the employer of the hotel staff. The franchisee will be responsible for reimbursing The Standardx for the payroll and related costs, but The Standardx will handle the management and provision of these employee services. This can simplify the franchisee's operational responsibilities, as they do not have to directly manage the hotel staff in these cases.