Does Sonesta Simply Suites' acceptance of payments after a breach constitute a waiver of its rights?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Waiver of Obligations. We and you may by written instrument unilaterally waive or reduce any obligation of or restriction upon the other under this Agreement, effective upon delivery of written notice to the other or another effective date stated in the notice of waiver. Any waiver granted will be without prejudice to any other rights we or you have, will be subject to continuing review, and may be revoked at any time and for any reason effective upon delivery of 10 days' prior written notice. We and you will not waive or impair any right, power, or option this Agreement reserves (including our right to demand exact compliance with every term, condition, and covenant or to declare any breach to be a default and to terminate this Agreement before its term expires) because of any custom or practice at variance with this Agreement's terms; our or your failure, refusal, or neglect to exercise any right under this Agreement or to insist upon the other's compliance with this Agreement, including any Brand Standard; our waiver of or failure to exercise any right, power, or option, whether of the same, similar, or different nature, with other Brand Hotels; the existence of franchise agreements for other Brand Hotels which contain provisions different from those contained in this Agreement; or our acceptance of any payments due from you after any breach of this Agreement. No special or restrictive legend or endorsement on any check or similar item given to us will be a waiver, compromise, settlement, or accord and satisfaction. We are authorized to remove any legend or endorsement, which then will have no effect.
The following provision applies if you or the franchise granted hereby are subject to the franchise registration or disclosure laws in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin: No statement, questionnaire, or acknowledgment signed or agreed to by you in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any of us, any franchise seller, or any other person acting on our behalf. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites' 2025 Franchise Disclosure Document, the brand's acceptance of payments from a franchisee after a breach of the franchise agreement does not constitute a waiver of its rights. Sonesta Simply Suites retains the right to demand strict compliance with all terms, conditions, and covenants within the agreement, and can still declare a breach as a default, potentially leading to termination of the agreement. This is regardless of any custom or practice that may vary from the agreement's terms, or any failure or neglect on the part of Sonesta Simply Suites to exercise its rights.
This provision protects Sonesta Simply Suites by ensuring that it can continue to receive payments without forfeiting its ability to enforce the franchise agreement's terms. It also clarifies that the existence of different provisions in franchise agreements with other Brand Hotels does not impact the enforceability of the specific agreement with the franchisee. Furthermore, any special endorsements on checks or payment items will not be considered a waiver or settlement.
For a prospective Sonesta Simply Suites franchisee, this means that even if the franchisor accepts payments after a breach, the franchisee is still responsible for correcting the breach and adhering to all terms of the agreement. Failure to do so could still result in default and termination, despite continued payment acceptance. This clause emphasizes the importance of understanding and complying with all aspects of the franchise agreement to avoid potential issues.
However, franchisees in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin should note that no statement signed in connection with the franchise relationship can waive claims under applicable state franchise law, including fraud in the inducement, or disclaim reliance on statements made by Sonesta Simply Suites. This provision supersedes any other conflicting terms in any document executed in connection with the franchise.