Can Hyatt assign its right of first offer for The Standardx to another party?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee represents that Franchisee has not signed this Agreement in reliance on any particular direct or indirect owner, officer or employee remaining with Hyatt in that capacity.
Hyatt may change its ownership or form and/or assign this Agreement and any other agreement to a third party without restriction.
After Hyatt's assignment of this Agreement to a third party who expressly assumes the obligations under this Agreement, Hyatt no longer will have any performance or other obligations under this Agreement.
Such an assignment
shall constitute a release of Hyatt and a novation with respect to this Agreement, and the assignee shall be liable to Franchisee as if it had been an original party to 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, Hyatt has the right to assign the franchise agreement and any other agreements to a third party without any restrictions. This includes the right of first offer. After Hyatt assigns the agreement to a third party, and that third party expressly assumes the obligations under the agreement, Hyatt is released from any further obligations. This transfer acts as a release of Hyatt and a novation, meaning the assignee becomes liable to the franchisee as if they were the original party to the agreement.
For a prospective The Standardx franchisee, this means that the rights and obligations of Hyatt under the franchise agreement can be transferred to another entity at any time. This could be another hotel chain, a financial institution, or any other third party. The franchisee must accept this possibility and understand that their contractual relationship could shift to a new entity.
This clause protects Hyatt's flexibility in managing its business and assets. While the new assignee must assume the obligations of the agreement, the franchisee has little control over who that assignee might be. Therefore, a franchisee should carefully consider the potential implications of this assignment clause and ensure they are comfortable with the possibility of dealing with a different entity than Hyatt during the term of the agreement.