For The Standardx hotels, when is payment due for room rentals and other services provided to guests?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
We provide room rentals and other services to our guests, including, but not limited to, food and beverage, spa, laundry, and parking. These products and services each represent individual performance obligations, and in exchange for these services, we receive fixed amounts based on published rates or negotiated contracts. Payment is due in full at the time the services are rendered or the goods are provided. If a guest enters into a package including multiple goods or services, the fixed price is allocated to each distinct good or service based on the standalone selling price for each item. Revenues are recognized over time when we transfer control of the good or service to the customer. Room rental revenues are recognized on a daily basis as the guest occupies the room, and revenues related to other products and services are recognized when the product or service is provided to the guest.
Source: Item 23 — Receipts (FDD pages 85–132)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, payment for room rentals and other services is due at the time the services are rendered or the goods are provided. This includes services such as food and beverage, spa treatments, laundry, and parking. The FDD specifies that The Standardx receives fixed amounts based on published rates or negotiated contracts in exchange for these services. If a guest purchases a package that includes multiple goods or services, the fixed price is allocated to each item based on its standalone selling price.
For a prospective franchisee, this means that The Standardx hotels collect payment immediately upon providing the service or good to the guest. This immediate payment structure helps to ensure a steady cash flow for the hotel. It also reduces the risk of unpaid bills, as payment is secured at the point of service.
The FDD also clarifies that revenues are recognized over time as control of the good or service is transferred to the customer. Room rental revenues are recognized daily as the guest occupies the room, while revenues from other products and services are recognized when those products or services are provided. This revenue recognition method aligns with standard accounting practices for the hospitality industry.