What mechanisms does The Standardx have to recover amounts funded under debt repayment guarantees?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
- (3) We have agreements with our unconsolidated hospitality venture partners or the respective third-party owners or franchisees to recover certain amounts funded under the debt repayment guarantee; the recoverability mechanism may be in the form of cash or HTM debt security.
- (4) Certain agreements give us the ability to assume control of the property if defined funding thresholds are met or if certain events occur.
At March 31, 2025, we are not aware, nor have we received any notification, that our third-party owners, franchisees, or unconsolidated hospitality ventures are not current on their debt service obligations where we have provided a debt repayment guarantee.
Other Guarantees—We may be obligated to fund up to $146 million related to certain guarantees as a result of the UVC Transaction (see Note 4). At March 31, 2025 and December 31, 2024, we had $62 million and $67 million, respectively, of guarantee liabilities recorded in other long-term liabilities on our condensed consolidated balance sheets associated with these guarantees.
Source: Item 1 — Financial Statements. (FDD pages 156–187)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the company enters into debt repayment guarantees to assist third-party owners, franchisees, and unconsolidated hospitality ventures in securing financing or better borrowing terms. The Standardx has agreements with these partners to recover amounts funded under these guarantees.
The mechanisms for recovery may include receiving cash or HTM (held-to-maturity) debt securities from the venture partners, third-party owners, or franchisees. Additionally, The Standardx may have agreements that allow it to assume control of the property if specific funding thresholds are met or if certain events occur.
As of March 31, 2025, The Standardx states that it was not aware of any third-party owners, franchisees, or unconsolidated hospitality ventures being behind on their debt service obligations where The Standardx had provided a debt repayment guarantee. The FDD also mentions that The Standardx may be obligated to fund up to $146 million related to certain guarantees as a result of the UVC Transaction. As of March 31, 2025, the company had $62 million of guarantee liabilities recorded in other long-term liabilities associated with these guarantees.