What do System Services Charges for The Standardx include?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
"System Services Charges" means the amounts that the Hyatt Group charges the Hotel, and Franchisee hereby agrees to pay, for the Hotel's equitably allocable share of the System Services Costs attributable to the System Services in which the Hotel participates (or is obligated to participate), as periodically determined by the Hyatt Group.
"System Services Costs" means, with respect to any of the System Services in which the Hotel participates (or is required to participate), all costs actually incurred or properly accrued by any member of Hyatt Group during the period of determination in respect of the provision of such System Services, including out-of-pocket expenses, costs for employees, occupancy costs, capital costs, administrative expenses, carrying costs and other costs incurred directly or indirectly in providing System Services.
System Services Costs shall include the actual costs incurred by the Hyatt Group and shall not be subject to any mark-up, premium or profit on any Mandatory Services, but may include a profit or markup component on Non-Mandatory Services as described above or as determined by the Hyatt Group.
Franchisee shall pay Hyatt:
- (b) the System Services Charges for the previous month.
Franchisee acknowledges that System Services Charges will include an allocable proportion of certain System Services Costs incurred during the period before the Hotel opens in accordance with this Agreement.
Any allocation of shared costs that the Hyatt Group makes in good faith and with the intention of fairly allocating such costs to System Services shall be binding on the parties hereto.
The fee for the Services is a portion of and included in the System Services Charges (as defined in the Franchise Agreement). The fee for the Services will fluctuate monthly, subject to Section 6b of this Agreement.
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, System Services Charges are the amounts that the Hyatt Group charges the Hotel for its share of System Services Costs. These costs are attributable to the System Services in which the Hotel participates or is obligated to participate. The Hyatt Group periodically determines these charges.
System Services Costs encompass all expenses incurred or accrued by any member of the Hyatt Group related to providing System Services. This includes out-of-pocket expenses, employee costs, occupancy costs, capital costs, administrative expenses, carrying costs, and other costs incurred directly or indirectly in providing System Services. System Services Costs will include the actual costs incurred by the Hyatt Group and will not be subject to any mark-up, premium or profit on any Mandatory Services, but may include a profit or markup component on Non-Mandatory Services as determined by the Hyatt Group.
Franchisees are required to pay these System Services Charges monthly. The FDD specifies that System Services Charges will include an allocable proportion of certain System Services Costs incurred during the period before the Hotel opens. Any allocation of shared costs that the Hyatt Group makes in good faith and with the intention of fairly allocating such costs to System Services shall be binding on the parties. The fee for certain services is a portion of and included in the System Services Charges and will fluctuate monthly.