Can Hyatt modify the System Services offered to The Standardx franchisees?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Mandatory Services and Non Mandatory Services comprise the System Services. If you are in full compliance with your obligations under the Franchise Agreement, we or one or more members of the Hyatt Group will provide you those System Services that we periodically specify. You must participate in all Mandatory Services and related programs, and may (at your option) participate in any or all Non-Mandatory Services and related programs, in the manner that we periodically specify. You must acquire all Mandatory Services (as we periodically modify them) only from a member of the Hyatt Group. We may periodically add to, delete from, and otherwise modify these System Services, and the scope of and manner of providing System Services, upon notice to you. Also, due to the differences in products, services, markets and hospitality experiences among Brand Hotels and other Hyatt Network Hotels, we may, where we deem appropriate in our judgment: (a) classify certain System Services as Mandatory Services for the Hotel which we classify as Non-Mandatory Services or do not offer to other Brand Hotels and/or other Hyatt Network Hotels; (b) not provide to the Hotel certain System Services that we provide to other Brand Hotels and/or other Hyatt Network Hotels; and (c) limit the scope of those System Services provided to franchised Brand Hotels, such as by limiting the access that franchised Brand Hotels have to certain customer and other proprietary information for Hyatt Network Hotels other than the Hotel. We describe the current System Services and the current charges for those System Services in Item 6, including all of the services offered pursuant to the Central Services Agreement, which are generally Non-Mandatory Services but in certain circumstances may be designated as Mandatory Services as a condition of our approval of the Hotel's management company, as consideration for other items negotiated as part of the Franchise Agreement, or as part of the requirements of the Quality Assurance and Compliance Program.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 40–45)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, Hyatt has the right to modify the System Services offered to franchisees. The FDD specifies that Hyatt may periodically add to, delete from, and otherwise modify these System Services, including the scope and manner of providing them, upon notice to the franchisee. This includes both Mandatory and Non-Mandatory Services. Mandatory Services must be acquired from a member of the Hyatt Group.
Hyatt may also classify certain System Services differently for different Brand Hotels or other Hyatt Network Hotels. This means that a service classified as Mandatory for one hotel might be Non-Mandatory or not offered at all to another. Additionally, Hyatt can limit the scope of System Services provided to franchised Brand Hotels, such as restricting access to certain customer and proprietary information for Hyatt Network Hotels other than the franchisee's hotel.
The current System Services and their associated charges are detailed in Item 6 of the FDD, including services offered under the Central Services Agreement. These services are generally Non-Mandatory but can be designated as Mandatory under certain circumstances, such as approval of the hotel's management company, as consideration for negotiated items in the Franchise Agreement, or as part of the Quality Assurance and Compliance Program. This flexibility allows Hyatt to tailor service offerings based on specific hotel needs and market conditions, but it also means that franchisees must stay informed of any changes to System Services and their obligations.
For a prospective The Standardx franchisee, this means that the services they are required to use and the services available to them can change over time. It is important to carefully review Item 6 of the FDD and discuss with Hyatt the potential for changes to System Services and how those changes could impact the operation of the hotel and associated costs. Understanding these potential modifications is crucial for budgeting and operational planning.