What agreement must the Assignee execute concurrently with the execution of the transfer agreement for Sonesta Simply Suites?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Assignee shall, concurrently with the execution of this Agreement, execute our current form of franchise agreement and related agreements (to reflect that the agreement is executed in connection with a transfer of the rights under the Existing Franchise Agreement) (the "New Franchise Agreement"), and Assignee Owner[s] shall execute the Guaranty and Assumption of Obligations attached thereto.
The New Franchise Agreement will govern Assignee's ownership and operation of the Hotel from and after the Closing Date.
If the Transfer is not consummated on or prior to the Outside Date, and we terminate this Agreement and withdraw our consent to the Transfer, then Assignee acknowledges and agrees that the New Franchise Agreement becomes null and void.
Source: Item 23 — RECEIPTS (FDD pages 80–246)
What This Means (2025 FDD)
According to the 2025 FDD, if a franchisee of Sonesta Simply Suites wishes to transfer their franchise to another party (the Assignee), the Assignee must execute the current form of the franchise agreement. This new agreement, termed the "New Franchise Agreement," must be executed concurrently with the transfer agreement. This ensures that the Assignee is legally bound to the current franchise terms and conditions set by Sonesta Simply Suites.
In addition to the New Franchise Agreement, the Assignee Owner(s) must also execute a Guaranty and Assumption of Obligations. This document ensures that the Assignee Owner(s) personally guarantee the obligations under the New Franchise Agreement. This is a common practice in franchising to provide the franchisor with additional security and recourse in case of default by the franchisee.
The New Franchise Agreement will govern the Assignee's ownership and operation of the Sonesta Simply Suites hotel after the transfer is completed. However, if the transfer does not occur by the agreed-upon date, and Sonesta Simply Suites terminates the transfer agreement, the New Franchise Agreement becomes null and void. This condition protects Sonesta Simply Suites by ensuring that the franchise agreement only takes effect if the transfer is successfully finalized.