When do The Standardx's performance guarantees expire?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
business ventures up to $659 million, net of any related letters of credit.
Performance Guarantees—Certain of our contractual agreements with third-party owners require us to guarantee payments to the owners if specified levels of operating profit are not achieved by their hotels. Except as described below, at December 31, 2024, our performance guarantees had $150 million of remaining maximum exposure and expire between 2025 and 2042.
Through acquisitions, we acquired certain management and hotel services agreements with performance guarantees based on annual performance levels and with expiration dates between 2027 and 2045. Contract terms within certain management and hotel services agreements limit our exposure, and therefore
Source: Item 10 — OTHER ASSETS (FDD pages 132–156)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, their performance guarantees have varying expiration dates. As of December 31, 2024, The Standardx's performance guarantees are set to expire between 2025 and 2042. These guarantees are part of contractual agreements with third-party owners, ensuring payments if specified operating profit levels aren't met by their hotels. The maximum exposure for these guarantees was $150 million.
Additionally, The Standardx acquired certain management and hotel services agreements that include performance guarantees tied to annual performance levels. These particular guarantees have expiration dates ranging from 2027 to 2045. However, the contract terms within these agreements limit The Standardx's exposure, making it difficult to reasonably estimate the maximum potential future payments.
For a prospective franchisee, this information indicates that The Standardx has ongoing financial commitments related to hotel performance. While these guarantees primarily affect third-party owners, they reflect the company's broader financial obligations and risk management strategies. Understanding the nature and extent of these guarantees can provide insight into The Standardx's financial stability and its approach to managing performance-related liabilities.