Under the Bahia Principe Transaction, in what segment of The Standardx's condensed consolidated financial statements are the operating results and financial position of the VIE consolidated?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Bahia Principe—During the year ended December 31, 2024, we entered into a shareholders' agreement with an unrelated third-party and acquired 50% of the outstanding shares of Management Hotelero Piñero, S.L. (the "Bahia Principe Transaction"). The joint venture, which is a variable interest entity ("VIE"), owns the Bahia Principe brand and manages Bahia Principe Hotels & Resorts-branded properties (see Note 6). Through our variable interest, we have the power to direct the activities that most significantly affect the economic performance of the VIE and have the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE and therefore, we are the primary beneficiary. We consolidate the operating results and financial position of this VIE in our condensed consolidated financial statements within our management and franchising segment.
Source: Item 1 — Financial Statements. (FDD pages 156–187)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the Bahia Principe Transaction involved The Standardx acquiring 50% of the outstanding shares of Management Hotelero Piñero, S.L., which owns the Bahia Principe brand and manages Bahia Principe Hotels & Resorts-branded properties. This joint venture is considered a variable interest entity (VIE).
The Standardx has the power to direct the activities that most significantly affect the economic performance of the VIE and has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Therefore, The Standardx is the primary beneficiary.
As a result, The Standardx consolidates the operating results and financial position of this VIE in its condensed consolidated financial statements. Specifically, these results are consolidated within The Standardx's management and franchising segment.