What is the role of The Standardx in fulfilling the award night obligation at owned and leased hotels?

According to The Standardx's 2025 Franchise Disclosure Document, The Standardx is directly responsible for fulfilling award night obligations only at hotels that The Standardx owns or leases. For managed and franchised hotels, The Standardx acts as an agent, arranging for the redemption of promotional awards, but the responsibility for fulfilling the award night stay falls on the individual managed or franchised property. This distinction is important for understanding The Standardx's role in the loyalty program and how revenues are recognized.

When a loyalty program member redeems points at a managed or franchised property, The Standardx recognizes the previously deferred revenue as revenues for reimbursed costs, net of redemption expenses paid to those hotels. In contrast, for owned and leased hotels, a portion of the revenue is deferred upon the initial stay when points are earned and recognized when the points are redeemed at those same owned or leased locations. This difference in revenue recognition reflects The Standardx's direct involvement and responsibility in fulfilling the award night obligation at owned and leased hotels.

For a prospective franchisee, this means that if you are considering a managed or franchised The Standardx hotel, you will be responsible for providing the actual award night stay when a loyalty member redeems their points. The Standardx will reimburse you for the cost of that stay, and they recognize the revenue associated with the points redemption. However, if you were to invest in a hotel owned or leased by The Standardx, the corporation handles the award night obligation directly, and the revenue recognition process is different, with revenues deferred and recognized within The Standardx's accounting system.