What are the Owner's payment obligations to Hyatt upon termination of The Standardx agreement?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon termination of this Agreement, Owner shall remit to Hyatt payment for Services rendered through the effective date of termination pursuant to any applicable Schedule.
Notwithstanding the foregoing, if this Agreement is terminated before the Term expires for any reason (subject to ARTICLE X), Franchisee agrees to pay Hyatt, within fifteen (15) days after the date of such termination, liquidated damages in a lump sum equal to the amount set forth in Exhibit B-1.
Notwithstanding the foregoing, if this Agreement is terminated because of a Consequential Termination, then the liquidated damages are one hundred fifty percent (150%) of the amount calculated in the preceding paragraph.
Franchisee agrees that the liquidated damages calculated under this Section 16.5 represent the best estimate of Hyatt's Brand Damages arising from any termination of this Agreement before the Term expires. Franchisee's payment of the liquidated damages to Hyatt will not be considered a penalty but, rather, a reasonable estimate of fair compensation to Hyatt for the Brand Damages Hyatt will incur because this Agreement did not continue for the Term's full length. Franchisee acknowledges that Franchisee's payment of liquidated damages is full compensation to Hyatt only for the Brand Damages resulting from the early termination of this Agreement and is in addition to, and not in lieu of, Franchisee's obligations to pay other amounts due to Hyatt under this Agreement as of the date of termination and to comply strictly with the de-identification procedures of Section 16.1 and Franchisee's other post-termination obligations.
16.6 System Services. Beginning on the date that this Agreement terminates or expires, Hyatt and its Affiliates shall stop providing System Services to the Hotel.
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, upon termination of the agreement, the Owner is obligated to remit payment to Hyatt for services rendered through the effective date of termination, as outlined in any applicable Schedule. These services are detailed in schedules such as the Field Marketing Program Schedule, Central Sales Services Schedule, Revenue Management Services Schedule, Global Property Guest Services Schedule, and Digital Ancillary Services Schedule.
Additionally, if the agreement is terminated before the term expires for any reason, the franchisee agrees to pay Hyatt liquidated damages within fifteen days of termination. The amount of these liquidated damages is specified in Exhibit B-1. However, if the termination results from a Consequential Termination, the liquidated damages increase to one hundred fifty percent of the amount calculated as per Exhibit B-1.
It's important to note that the payment of liquidated damages does not relieve the franchisee of other obligations, such as de-identification procedures and payments for other amounts due to Hyatt as of the termination date. Hyatt will also cease providing System Services to the hotel upon termination or expiration of the agreement. Franchisees should carefully review the schedules and exhibits referenced in the agreement to fully understand their payment obligations upon termination.