From what sources does The Standardx's 'Owned and leased' segment derive its earnings?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
- Owned and leased—This segment derives its earnings from owned and leased hotel properties located predominantly in the United States but also in certain international locations, and for purposes of segment Adjusted EBITDA, includes our pro rata share of unconsolidated hospitality ventures' Adjusted EBITDA, primarily based on our ownership percentage of each venture. Adjusted EBITDA includes intercompany management fee expenses paid to our management and franchising segment, which are eliminated in consolidation. Intersegment revenues relate to promotional award redemptions earned by our owned and leased hotels related to our co-branded credit card programs and are eliminated in consolidation.
Source: Item 1 — Financial Statements. (FDD pages 156–187)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the 'Owned and leased' segment generates its earnings from hotel properties that The Standardx owns or leases. These properties are primarily located in the United States, but also include some international locations. The segment's Adjusted EBITDA also incorporates The Standardx's pro rata share of unconsolidated hospitality ventures' Adjusted EBITDA, primarily based on the company's ownership percentage in each venture.
Notably, the Adjusted EBITDA calculation includes intercompany management fee expenses paid to The Standardx's management and franchising segment, which are then eliminated during consolidation. Additionally, intersegment revenues are generated from promotional award redemptions at the owned and leased hotels related to The Standardx's co-branded credit card programs. These revenues are also eliminated during consolidation.
For a prospective franchisee, this indicates that The Standardx's financial performance in this segment is tied to both its directly owned/leased properties and its investments in other hospitality ventures. The intercompany transactions and eliminations suggest a complex internal accounting structure, which may require further investigation to fully understand the segment's profitability and cash flow.