Under what condition can a The Standardx franchisee manage the Hotel themselves?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
or to help us obtain intellectual property rights in the Innovation.
OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS
Hotel Management
Either a management company we approve, or you (if we approve you to manage the Hotel), must at all times retain and exercise direct management control over all aspects of the Hotel's business and be the employer of the Hotel's Core Management and other personnel, except for any members of Core Management that are overseen by an F&B Operator whom we approve. You may not enter into any lease, management agreement, or other similar arrangement with any management company for the management or other oversight of all or a part of the Hotel's operation (a "Management Arrangement") without our prior written approval of the management company, and you may not yourself manage the Hotel without our approval of you as the Hotel's operator. We will not unreasonably withhold our approval if the management company or you (as applicable) meets our minimum qualifications and ensures that its or your personnel attend and satisfactorily complete required brand standard training programs. If we approve a management company, as a condition of that approval, the management company must sign the documents we require to protect our intellectual property rights and reflect its agreement to perform its management responsibilities and operate the Hotel in compliance with the Franchise Agreement. Our current form of Management Company Rider is attached as Exhibit F to the Franchise Agreement.
We may refuse to approve a management company that is a Competing Brand Owner. "Competing Brand Owner" means any entity that (a) is either a franchisor or owner of a Competing Brand (defined below), (b) manages or otherwise operates hotels exclusively for the franchisor or owner of a Competing Brand, or (c) is an affiliate of any entity described in (a) or (b) above. A "Competing Brand" is a hotel concept that has at least 5 hotels operating under that concept's trade name anywhere in the world and that, in our reasonable opinion, competes with Brand Hotels.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 71–74)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, a franchisee can manage the Hotel themselves if The Standardx approves them to do so. The FDD specifies that either a management company approved by The Standardx or the franchisee themselves (if approved by The Standardx) must retain direct management control over all aspects of the Hotel's business. The franchisee cannot manage the Hotel without explicit approval from The Standardx.
The Standardx will not unreasonably withhold approval if the franchisee meets the minimum qualifications and ensures their personnel attend and satisfactorily complete the required brand standard training programs. If The Standardx approves a management company, that company must sign documents to protect The Standardx's intellectual property rights and agree to operate the Hotel in compliance with the Franchise Agreement.
If a previously approved management company or the franchisee becomes a Competing Brand Owner, fails to meet minimum qualifications, or fails to comply with the Franchise Agreement (including System Standards or remaining in a remedial status under the Quality Assurance and Compliance Program for 3 or more consecutive months), The Standardx may revoke its approval. In such cases, the franchisee must terminate the management arrangement and either assume direct control of the Hotel's management and operation, if The Standardx approves, or engage another approved management company.