Under what conditions might The Standardx receive a reduced Royalty Fee for a new hotel?

According to The Standardx's 2025 Franchise Disclosure Document, if a franchisee is constructing a new hotel, The Standardx may agree to reduce the Royalty Fee for the first one to three years of the hotel's operations. The standard Royalty Fee is 5% of Gross Rooms Revenue accrued during the previous month. This potential reduction in royalty fees can provide financial relief during the initial years of operation, when expenses are typically higher and revenue may be lower as the hotel establishes itself in the market.

This incentive is particularly beneficial for new franchisees who are undertaking the significant investment of constructing a new hotel. The reduced royalty fee can help improve cash flow and profitability during the critical startup phase. The specific amount and duration of the royalty fee reduction are subject to negotiation with The Standardx, allowing for flexibility based on the individual circumstances of the project.

Prospective franchisees should discuss the possibility of a reduced royalty fee with The Standardx during the franchise application process. Understanding the terms and conditions of any potential reduction is essential for accurate financial planning and forecasting. Franchisees should also inquire about the criteria The Standardx uses to determine eligibility for a reduced royalty fee, as this can vary depending on factors such as location, market conditions, and the overall financial strength of the franchisee.