What is the per-room liquidated damages amount in the event of condemnation for The Standardx?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
| Section | Subject | Applicable Term | |
|---|---|---|---|
| 10.1 | Per room liquidated damages – condemnation | Five Thousand Dollars ($5,000) |
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, in the event of condemnation, the per-room liquidated damages are $5,000. This means that if the hotel is taken by eminent domain, condemnation, or expropriation, The Standardx franchisee may be liable for this amount per room.
This liquidated damages clause is triggered if the franchisee and The Standardx do not agree to relocate the hotel and either party terminates the agreement. The franchisee can avoid paying these damages by signing a Termination Agreement. However, the Termination Agreement stipulates that if the franchisee or its affiliates begin construction or operation of a similar hotel within the Area of Protection within 24 months of the termination, they must pay The Standardx liquidated damages equal to $5,000 multiplied by the number of guest rooms in the new hotel.
If the franchisee fails to sign the Termination Agreement within a reasonable time after The Standardx delivers it, the franchisee must pay the liquidated damages as per Section 16.5 at the time of termination, in addition to other post-termination obligations. This clause is designed to protect The Standardx from losing business and brand recognition due to the termination of the franchise agreement and the franchisee potentially opening a competing hotel nearby.