Under what circumstances, besides those explicitly provided in The Standardx franchise agreement, would a franchisee ceasing operations at the site trigger consequences related to proprietary marks?

According to The Standardx's 2025 Franchise Disclosure Document, a franchisee's ceasing of hotel operations at the site in affiliation with the Proprietary Marks can trigger consequences, particularly if the hotel fails to be identified as a Brand Hotel or if the franchisee loses possession of the hotel, except as otherwise provided in the franchise agreement. This means that even if the franchise agreement doesn't explicitly cover a certain scenario of ceasing operations, The Standardx can still take action if the franchisee continues to use the brand's identity or loses control of the hotel.

Furthermore, the franchisee must immediately cease using the Hotel System and begin to de-identify the Hotel by taking action to ensure that the Hotel no longer is identified as a Brand Hotel. The franchisee is obligated to remove all structures and items identifying the Hotel System, including elements of trade dress, distinctive features, and items associated with the Hotel System, such as FF&E uniquely identified with a Brand Hotel, interior signage, and other materials bearing the Proprietary Marks. The franchisee must also take steps such as scheduling the removal of exterior signage and changing the hotel's telephone listing to avoid misleading customers into believing the hotel is still affiliated with The Standardx.

If the franchisee fails to comply with de-identification provisions, The Standardx can impose a royalty fee of $5,000 per day until de-identification is completed to their satisfaction. Additionally, The Standardx's representatives are permitted to enter the hotel to complete the de-identification process at the franchisee's expense. This highlights the importance of adhering to The Standardx's de-identification requirements to avoid financial penalties and intervention by the franchisor.

Moreover, the franchisee is prohibited from using any Proprietary Mark as part of any corporate or legal business name, with prefixes or suffixes, in unauthorized services or products, or in domain names without prior approval. Unauthorized use of the Proprietary Marks can lead to The Standardx requiring the franchisee to destroy all offending items without reimbursement. This underscores the strict control The Standardx maintains over its brand and the potential financial consequences for franchisees who misuse it.