What does the 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.
The Hyatt Group may in its reasonable judgment periodically change its method of allocation of the System Services Costs among Participating Hotels, and the categories of Brand Hotels and/or other Hyatt Network Hotels that are classified as Participating Hotels, provided that such method of allocation and categories of Participating Hotels shall at all times be determined on a reasonable, equitable and nondiscriminatory basis;
- 6.2 Monthly Fees to Hyatt.
On or before the tenth (10th) day of each month or such later day of the month that Hyatt periodically specifies, 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.
System Services Charges shall be determined on the same basis as such amounts are determined for other Participating Hotels.
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."
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, the System Services Charges are the amounts that the Hyatt Group charges the Hotel for its share of the System Services Costs attributable to the System Services in which the Hotel participates or is obligated to participate. These charges are periodically determined by the Hyatt Group. System Services Costs include all costs actually incurred or properly accrued by any member of Hyatt Group during the determination period. These costs relate to providing System Services, including 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 also include the actual costs incurred by the Hyatt Group, without any markup, premium, or profit on Mandatory Services. However, they may include a profit or markup component on Non-Mandatory Services, as determined by the Hyatt Group. The Hyatt Group can periodically change its method of allocating System Services Costs among Participating Hotels and the categories of Brand Hotels or other Hyatt Network Hotels classified as Participating Hotels, provided that the allocation method and categories of Participating Hotels are determined on a reasonable, equitable, and nondiscriminatory basis.
For a prospective franchisee, this means that the System Services Charges can vary based on the services the hotel uses and the costs incurred by Hyatt in providing those services. The franchisee will need to pay these charges monthly, and they can include costs incurred even before the hotel opens. The franchisee should be aware that these costs can fluctuate and that Hyatt has the right to allocate shared costs in good faith, which will be binding on both parties. Additionally, the franchisee is responsible for paying amounts owed to third parties arising out of the Hotel's operation, including commissions, fees for reservations, guest frequency programs, and cooperative advertising programs.