Under what conditions might The Standardx reduce or refund FIP fees?

According to The Standardx's 2025 Franchise Disclosure Document, the brand may reduce or refund Franchise Improvement Program (FIP) fees if a hotel demonstrates improved performance or accelerates its compliance with renovation requirements. The FDD also states that Brand Hotels are eligible for up to a 100% reduction of applicable FIP or Brand Performance Program (BPP) fees based on improvements in performance.

This policy offers a potential financial benefit to franchisees who are initially placed in the FIP due to low QA scores. By actively addressing the issues that led to the low scores and demonstrating tangible improvements, a franchisee can reduce or even eliminate the administrative fees associated with the FIP. This provides an incentive for franchisees to quickly rectify any operational shortcomings and maintain brand standards.

The FIP fees can be substantial, with Stage 1 incurring a $5,000 administrative fee, Stage 2 a $15,000 fee, and Stage 3 a $20,000 fee. If a hotel fails to exit the FIP by the end of Stage 3, it enters the BPP, which carries an annual administrative fee of $45,000. The possibility of a fee reduction or refund can significantly alleviate the financial burden on franchisees undergoing performance improvement measures. Franchisees should proactively communicate with The Standardx to understand the specific criteria and steps required to qualify for a reduction or refund of FIP fees.

It's important for prospective franchisees to understand the specific metrics and timelines associated with performance improvement to qualify for fee reductions. They should also inquire about the process for requesting a review of their FIP status and documenting their progress. Understanding these details will enable franchisees to effectively manage their operations, maintain brand standards, and potentially mitigate the financial impact of the FIP.