Under The Standardx franchise agreement, what constitutes 'control' in the definition of 'Affiliate'?

According to The Standardx's 2025 Franchise Disclosure Document, the term 'Affiliate' is defined in relation to control. Specifically, an 'Affiliate' is any entity or person directly or indirectly owned or controlled by, under common control with, or owning or controlling a party. The definition of 'control' is further clarified as the power to direct or cause the direction of management and policies.

For a prospective The Standardx franchisee, this definition is important because it clarifies the scope of relationships that could be considered affiliated with the franchisee's business. If an entity is deemed an affiliate due to the franchisee's control over it, or vice versa, The Standardx may apply certain terms and conditions of the franchise agreement to that affiliate as well. This could include adherence to system standards, financial reporting, and other obligations outlined in the franchise agreement.

The broad definition of 'Affiliate' and 'control' means that The Standardx has the ability to oversee a wide range of entities connected to the franchisee. This may impact the franchisee's ability to structure their business relationships and investments. Franchisees should carefully consider these implications and seek legal counsel to fully understand the extent of these controls and how they may affect their business operations and related entities.