Does Hyatt's judgment regarding The Standardx franchise have any limitations?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Hyatt has the right from time to time to develop, operate, and change the Hotel System and System Standards in any manner not specifically prohibited by this Agreement. Whenever Hyatt has reserved in this Agreement a right to take or to withhold an action, or to grant or decline to grant Franchisee the right to take or omit an action, Hyatt may, except as otherwise specifically provided in this Agreement, make its decision or exercise its rights based on information readily available to it and its judgment of what is in the best interests of Hyatt and its Affiliates, the Brand Hotel network generally, or the Hotel System at the time its decision is made, without regard to whether Hyatt could have made other reasonable or even arguably preferable alternative decisions or whether its decision promotes Hyatt's (or its Affiliates') financial or other individual interest. Except where this Agreement expressly obligates Hyatt reasonably to approve or not unreasonably to withhold its approval of any of Franchisee's actions or requests, Hyatt has the absolute right to refuse any request Franchisee makes or to withhold its approval of any of Franchisee's proposed, initiated, or completed actions that require its approval. However, Hyatt may withhold its consent, whenever and wherever otherwise required, if Franchisee is in default under 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 develop, operate, and change the Hotel System and System Standards, provided it's not specifically prohibited in the agreement. Hyatt can make decisions or exercise its rights based on readily available information and its judgment of what benefits Hyatt, its affiliates, the Brand Hotel network, or the Hotel System. This is with the condition that Hyatt's decision is made at the time, without needing to consider other reasonable alternatives or whether the decision favors Hyatt's financial interests.
However, there are limitations to Hyatt's judgment. Hyatt must reasonably approve or not unreasonably withhold approval of the franchisee's actions or requests when expressly obligated by the agreement. Hyatt retains the right to refuse any request from the franchisee or withhold approval for proposed, initiated, or completed actions that require its approval, unless the franchisee is in default under the agreement.
This means that while Hyatt has broad discretion in managing the franchise system, it is not unlimited. The Standardx franchisees should be aware of the specific instances in the franchise agreement where Hyatt's approval is required and the standards by which such approval will be granted or withheld. Understanding these limitations is crucial for franchisees to navigate their relationship with Hyatt and to ensure their actions align with the franchise agreement's requirements.