How long does Hyatt have to respond to The Standardx franchisee's offer to sell the Offered Rights?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
erms must relate exclusively to the Offered Rights and not to any other assets or rights.
Hyatt will then have thirty (30) days after receiving the Offer Terms to notify Franchisee whether Hyatt elects to acquire the Offered Rights on the Offer Terms, provided that (1) Hyatt may substitute cash, a cash equivalent, or marketable securities for any form of payment proposed in the Offer Terms (such as ownership interests in an entity) and may elect to pay the net present value of any payments to be made over time; (2) Hyatt must be afforded the opportunity to conduct customary due diligence on the Offered Rights; and (3) Hyatt must receive, and Franchisee and its Owners agree to make, all customary representations, warranties, and indemnities in Hyatt's purchase, including representations and warranties as to ownership and condition of and title to assets; liens and encumbrances on assets; validity of contracts and agreements; liabilities affecting the assets, contingent or otherwise; and indemnities for all actions, events, and conditions that existed or occurred in connection with the Hotel or Franchisee's business before the closing.
If Hyatt exercises the right of first offer, the closing will take place at a location and on a date that Hyatt chooses, within ninety (90) days after Hyatt delivers its notice of exercise to Franchisee or such longer period as may be contemplated by the Offer Terms. Hyatt and Franchisee will sign documents, including deeds, affidavits, transfers and assignments, and any other documents necessary or appropriate for the sale or transfer of the Offered Rights. Franchisee must satisfy all liens, mortgages, and/or encumbrances on the Hotel. Hyatt and Franchisee will share equally any closing costs.
If Hyatt notifies Franchisee in writing that Hyatt does not intend to exercise its right of first offer with respect to any Offer Terms, or fails to notify Franchisee of Hyatt's decision within the thirty (30)-day period described above, then Franchisee thereafter may offer the Offered Rights to
any third party on terms no more favorable to that party than the Offer Terms. However, Franchisee or its Owners may sell or transfer the Offered Rights only if Hyatt otherwise approves the transfer in accordance with, and Franchisee (and its Owners) and the transferee comply with the conditions in, ARTICLE XII of this Agreement. This means that, even if Hyatt does not exercise Hyatt's right of first offer, if the proposed transfer otherwise would not be allowed under ARTICLE XII, Franchisee (or its Owners) may not move forward with the transfer at all.
Later, Franchisee may determine to offer the Offered Rights on terms which are more favorable to the buyer than the Offer Terms, or Franchisee may determine to change the Offered Rights, then Franchisee must first offer those new terms to Hyatt according to the procedures described above.
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 30 days to respond to a franchisee's offer to sell their rights. Specifically, if a franchisee decides to sell or transfer their rights, they must first offer Hyatt the opportunity to acquire these rights by providing written notice that includes the terms of the proposed sale.
Following the receipt of the offer terms, Hyatt has thirty days to notify the franchisee whether it will acquire the rights under those terms. However, Hyatt can substitute cash or marketable securities for any proposed form of payment and has the right to conduct due diligence. Additionally, the franchisee must provide customary representations, warranties, and indemnities in Hyatt's purchase.
If Hyatt does not respond within the 30-day period or notifies the franchisee that it does not intend to exercise its right of first offer, the franchisee may then offer the rights to a third party, provided the terms are no more favorable than those initially offered to Hyatt. However, the sale or transfer is still subject to Hyatt's approval under Article XII of the agreement, meaning that Hyatt can still block the transfer even if they decline the right of first offer if the transfer would not be allowed under Article XII.