What intersegment revenues are related to The Standardx's owned and leased hotels?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
- Owned and leased—This segment derives its earnings from owned and leased hotel properties located predominantly in the United States but also in certain international locations, and for purposes of segment Adjusted EBITDA, includes our pro rata share of unconsolidated hospitality ventures' Adjusted EBITDA, primarily based on our ownership percentage of each venture. Adjusted EBITDA includes intercompany management fee expenses paid to our management and franchising segment, which are eliminated in consolidation. Intersegment revenues relate to promotional award redemptions earned by our owned and leased hotels related to our co-branded credit card programs and are eliminated in consolidation.
Source: Item 1 — Financial Statements. (FDD pages 156–187)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, intersegment revenues for its owned and leased hotels relate to promotional award redemptions earned through co-branded credit card programs. These revenues are eliminated during the consolidation of The Standardx's financial statements. The FDD also provides intersegment revenue amounts. For example, under the segment information, the intersegment revenues are $15 for one period, $7 for another, and no revenue is listed for a third period. The total intersegment revenue is $22.
For a prospective franchisee, this means that while The Standardx's owned and leased hotels generate revenue through promotional award redemptions linked to co-branded credit cards, these revenues are not included in the consolidated financial results presented to franchisees. This is because they represent transactions within The Standardx's corporate structure.
Understanding intersegment revenues is important for franchisees as it provides insight into how different parts of The Standardx's business interact financially. While these specific revenues are eliminated in consolidated reporting, they reflect the interconnectedness of The Standardx's various segments and the potential benefits that the owned and leased hotels receive from the company's co-branded credit card programs. Franchisees may want to inquire about how these programs could potentially benefit their own franchised locations through increased customer loyalty and promotional opportunities.