How often are third-party owners and franchisees invoiced a system-wide assessment fee by The Standardx?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Hyatt's system-wide services are accounted for under a fund model whereby third-party owners and franchisees are invoiced a system-wide assessment fee on a monthly basis. We recognize the revenues over time as services are provided in revenues for reimbursed costs on our consolidated statements of income. We have discretion over how we spend program revenues, and therefore, we are the principal. Expenses related to the system-wide programs are recognized as incurred in reimbursed costs on our consolidated statements of income. Over time, we intend to manage the system-wide programs to break-even and not earn a profit on these services, but the timing of revenues received from the owners may not align with the timing of the expenses incurred to operate the programs. Therefore, any difference between the revenues and expenses will impact our net income.
Source: Item 23 — Receipts (FDD pages 85–132)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, third-party owners and franchisees are invoiced a system-wide assessment fee on a monthly basis. This fee is part of a fund model used to account for The Standardx's system-wide services. The revenues from these fees are recognized over time as the services are provided and are classified as revenues for reimbursed costs on the company's consolidated statements of income.
The Standardx has discretion over how the program revenues are spent, acting as the principal in these transactions. The company intends to manage these system-wide programs to break even over time, without earning a profit from these services. However, the timing of revenue received from owners and franchisees may not always align with the timing of expenses incurred to operate the programs.
Any difference between the revenues and expenses related to these system-wide programs will impact The Standardx's net income. This means that while the goal is to break even, fluctuations in timing between revenue and expenses could lead to temporary gains or losses for The Standardx. For a prospective franchisee, this indicates a consistent monthly assessment for system-wide services, with the understanding that the overall financial performance of these services can affect the franchisor's financial statements.