How many days does the lender have to cure a default under The Standardx Franchise Agreement?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event of a default by Franchisee under the Franchise Agreement Hyatt shall allow Lender thirty (30) days from the date of any such notice to cure or cause to be cured the default(s) specified in such notice. If such default is of a non
monetary nature and cannot be cured within said thirty (30) day period by reason of the time necessary for Lender to exercise its rights and remedies pursuant to the Loan Documents or applicable law, then Lender shall have such additional period of time, as is reasonably necessary to complete the exercise of its rights and remedies, provided that Lender proceeds with and continues to cure such non-monetary default and exercise of remedies with due diligence, but in no event shall such period exceed one hundred and eighty (180) days following notice to Lender. Notwithstanding any of the foregoing, in the event of a health or life safety default, the cure period shall be three (3) days. In addition, Lender does not have the ability to cure the following defaults by Franchisee: bankruptcy, assignment for the benefit of creditors, appointment of a receiver, breach of restrictions on Control Transfers, or breach of Trade Restriction Laws, but foreclosure of Lender's mortgage by Lender shall constitute curing of such defaults solely for the purpose of this Comfort Letter and commencement of foreclosure proceedings shall constitute commencement of cure solely for the purpose of this Comfort Letter; provided, however, if Lender petitions for the appointment of a receiver, Lender (y) shall not, during the term of the receivership, consent to a sale or transfer of the Hotel to a third party unless Hyatt has approved the transferee in accordance with Section 12.4 of the Franchise Agreement and (z) any receiver must be authorized to operate the Hotel in accordance with the Franchise Agreement and meet Hyatt's reasonable requirements for operators of Hyatt-affiliated hotels. For the avoidance of doubt, Lender is not required to cure any default by Franchisee under the Franchise Agreement except as set forth below in connection with an Acquisition.
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, a lender is typically given 30 days to cure a default specified in a notice. However, if the default is non-monetary and cannot be resolved within 30 days due to the time required for the lender to exercise its rights, the lender may have additional time, not exceeding 180 days, provided they proceed with due diligence. In the event of a health or life safety default, the cure period is only three days.
Certain defaults, such as bankruptcy, assignment for the benefit of creditors, appointment of a receiver, breach of restrictions on Control Transfers, or breach of Trade Restriction Laws, cannot be cured by the lender. However, foreclosure of the lender's mortgage is considered a cure for these defaults, specifically for the purposes of the Comfort Letter, and commencing foreclosure proceedings is considered the start of the cure.
It's important to note that the lender is not obligated to cure any default by the franchisee unless it relates to an Acquisition. If the lender acquires the hotel through foreclosure or a similar transaction, they must assume the franchisee's obligations under the Franchise Agreement. Within 30 days of the Acquisition, The Standardx and the lender must sign an assignment and assumption agreement or enter into a new franchise agreement.