What happens to The Standardx agreement if there is a Flag Change by the Owner?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
- c.
Termination for Assignment.
This Agreement shall automatically terminate upon any Flag Change by Owner.
For purposes of this clause, "Flag Change" means any termination of Hyatt's franchise relationship with Owner or any change resulting in the Property ceasing to be under a management, franchise or similar agreement with a direct or indirect subsidiary of Hyatt Hotels Corporation.
- d.
Effect of Termination of Agreement.
Upon termination or expiration of this Agreement:
- i.
Owner shall immediately cease using the Services and Hyatt shall cease providing Services to Owner under this Agreement;
- ii.
Upon termination, Owner shall pay all Fees for Services provided up to the expiration/termination date.
- iii.
The Parties agree that Sections that by their nature, or to give effect to their meaning, must survive expiration or termination of this Agreement, shall survive any expiration or termination of this Agreement.
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 agreement automatically terminates if the Owner initiates a Flag Change. A "Flag Change" occurs when Hyatt's franchise relationship with the Owner ends, or if the property ceases to be managed, franchised, or under a similar agreement with a direct or indirect subsidiary of Hyatt Hotels Corporation.
This means that if the Owner decides to switch to a different hotel brand or management system not affiliated with Hyatt, the franchise agreement with The Standardx is immediately terminated. This provision protects Hyatt's brand integrity and ensures that properties operating under The Standardx name adhere to Hyatt's standards and systems.
Upon termination due to a Flag Change, the Owner must immediately stop using The Standardx's services, and Hyatt will cease providing services. The Owner is obligated to pay all fees for services rendered up to the termination date. Certain sections of the agreement that, by their nature, are meant to survive termination (such as those concerning payment for services already provided or confidentiality) will remain in effect even after the agreement ends.