What happens to The Standardx application fee if the applicant withdraws the application before approval?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
he date of this Application or later supplemented to this Application,) are or will be true, complete and current. Franchisor shall not be deemed to have knowledge of any facts not contained in this Application or in the attached documents.
Included with this Application is the application fee in the amount specified in the FDD or letter of intent. Applicant hereby expressly acknowledges that acceptance and deposit of the application fee by Franchisor does not, in any respect, bind or obligate Franchisor to enter into a Franchise Agreement granting Applicant a franchise. This Application is neither an offer of a franchise by Franchisor nor a contract for the acquisition of a franchise or any other rights to operate a Hyatt-affiliated Hotel. Applicant further acknowledges that the research, investigation, review and approval process and similar administrative functions of Franchisor constitute the sole and only consideration for the application fee submitted herewith. If Applicant withdraws this Application before Franchisor approves it, or if Franchisor does not approve this Application for any reason, Franchisor will refund Applicant's application fee less a $5,000 fee
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, if an applicant withdraws their application before The Standardx approves it, The Standardx will refund the application fee. However, The Standardx will deduct a $5,000 fee to cover their costs associated with evaluating the application.
This means that a prospective franchisee who changes their mind before final approval will not receive a full refund of the initial application fee. The $5,000 deduction is intended to compensate The Standardx for the expenses incurred during the review and evaluation process. This policy is fairly common in franchising, as franchisors invest time and resources in assessing each applicant's suitability.
It is important to note that once The Standardx approves the application, the application fee becomes non-refundable. This holds true even if the franchisee and The Standardx do not ultimately sign a Franchise Agreement. Therefore, applicants should carefully consider their decision before submitting an application to The Standardx, as the fee is at risk once the application is approved.