Can Hyatt and its affiliates engage in any activities they desire, including competing lodging facilities, regardless of whether they use The Standardx's proprietary marks or hotel system?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1.4 No Other Restrictions. Except for the limited exclusivity provided in Section 1.3, Franchisee's rights under this Agreement are nonexclusive in all respects, the Hotel has no territorial protection whatsoever, and Hyatt and its Affiliates have the right without restriction to engage in any and all activities Hyatt and they desire (including with respect to any and all types of lodging facilities), at any time and place, whether or not using the Proprietary Marks or any aspect of the Hotel System, and whether or not those activities compete with the Hotel. Without limiting the foregoing, Franchisee acknowledges that Hyatt and its Affiliates currently operate other franchised and non-franchised systems for lodging facilities and other accommodations and hospitality affiliations that use different brand names, trademarks, and service marks, including those with the "Hyatt" name as part of their brand name, some of which might operate and have facilities in the Area of Protection during the AOP Term, that will compete directly with Franchisee. Hyatt and its Affiliates may use or benefit from, among other things, common computer systems, administrative systems, reservation systems, purchasing systems and personnel, and may provide some or all System Services to other Hyatt Network Hotels and other hotels, lodging facilities and other businesses, even if they compete with the Hotel. Franchisee will have no right to pursue any claims, demands, or damages as a result of these activities, whether under breach of contract, unfair competition, implied covenant of good faith and fair dealing, divided loyalty, or other theories.
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, Hyatt and its affiliates retain broad rights to engage in any activities they desire, including operating competing lodging facilities. Except for limited exclusivity within an Area of Protection, a The Standardx franchisee receives nonexclusive rights, and their hotel has no territorial protection. Hyatt and its Affiliates can operate any and all types of lodging facilities, at any time and place, whether or not using The Standardx's Proprietary Marks or any aspect of the Hotel System, and whether or not those activities compete with the Hotel.
This means that a The Standardx franchisee could face direct competition from other lodging facilities owned or franchised by Hyatt, even within the same area. These competing facilities might operate under different brand names and trademarks, some of which may include the "Hyatt" name. Hyatt and its affiliates may also share resources and systems, such as computer, administrative, reservation, and purchasing systems, across their various lodging facilities, including those that compete with the franchisee's The Standardx hotel.
The FDD explicitly states that the franchisee has no right to pursue claims or damages resulting from these competitive activities, regardless of the legal theory. This includes claims related to breach of contract, unfair competition, or divided loyalty. Therefore, a prospective The Standardx franchisee should be fully aware of the potential for competition from Hyatt and its affiliates and understand that they will have limited recourse if such competition arises.