Between what years do The Standardx's performance guarantees expire as of March 31, 2025?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Performance Guarantees and Performance Cure Payments—Certain of our contractual agreements with third-party owners require us to guarantee payments to the owners if specified levels of operating profit are not achieved by their hotels. Except as described below, at March 31, 2025, our performance guarantees had $149 million of remaining maximum exposure and expire between 2025 and 2042.
Through acquisitions, we acquired certain management and hotel services agreements with performance guarantees based on annual performance levels and with expiration dates between 2027 and 2045. Contract terms within certain of these management and hotel services agreements limit our exposure, and therefore, we are unable to reasonably estimate our maximum potential future payments.
Source: Item 1 — Financial Statements. (FDD pages 156–187)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, as of March 31, 2025, the company's performance guarantees expire between 2025 and 2042. These guarantees, with a remaining maximum exposure of $149 million, are part of contractual agreements with third-party owners, ensuring payments if their hotels do not achieve specified operating profit levels.
Additionally, The Standardx acquired certain management and hotel services agreements through acquisitions that include performance guarantees based on annual performance levels. These particular guarantees have expiration dates ranging from 2027 to 2045. However, the document notes that the company is unable to reasonably estimate the maximum potential future payments due to contract terms that limit their exposure within these agreements.
For a prospective franchisee, this information highlights The Standardx's financial commitments and potential liabilities related to hotel performance. Understanding the nature and extent of these guarantees, as well as the factors that could affect their exposure, would be a crucial part of assessing the overall financial health and stability of the company.