Does the Sonesta Simply Suites agreement specify the criteria for determining 'noncompliance'?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
If we exercise any of these rights, the exercise will not be a waiver of any breach by you of any term, covenant, or condition of this Agreement.
B. Immediate Termination by Us. We have the right to terminate this Agreement immediately upon notice to you (or terminate it at the earliest time permitted by applicable law) if one or more of the following breaches to this Agreement or any of its attachments occur:
(1) After curing any Event of Default of this Agreement or the Brand Standards you engage in the same noncompliance within any consecutive 24 month period, or you fail on three or more separate occasions within any 12 consecutive month period to comply with this Agreement, whether or not the noncompliance is corrected after notice; or after we have notified you of your noncompliance with any of the requirements imposed by this Agreement or the Brand Standards, regardless of materiality, you engage in a pattern of noncompliance with any of those requirements, whether or not the noncompliance is corrected after notice, which pattern of non-compliance in and of itself will be deemed material:
(2) You or any guarantor of your obligations under this Agreement:
a.
Fail to pay us (or our affiliates) any amounts due and do not correct the failure within ten days after we deliver written notice of that failure to you;
- b.
Generally fails to pay your or its debts as they become due, including to the lessor of Premises (if leased) and any other amounts owed in connection with your Hotel; admits in writing your or its insolvency or inability to pay its debts or obligations as they become due; your or its liabilities exceed its assets; or makes a general assignment for the benefit of your or its creditors;
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to the 2025 Sonesta Simply Suites Franchise Disclosure Document, the franchise agreement outlines specific instances that constitute noncompliance, which can lead to termination of the agreement. Sonesta Simply Suites can terminate the agreement immediately if a franchisee engages in the same noncompliance after curing an initial default within a 24-month period. Similarly, failing to comply with the agreement on three or more separate occasions within a 12-month period, regardless of whether the noncompliance is corrected, can also result in immediate termination.
Furthermore, a pattern of noncompliance with any requirements imposed by the agreement or the Brand Standards, even if corrected after notice, is considered a material breach and can lead to termination. This includes failing to pay amounts due to Sonesta Simply Suites or its affiliates, and not correcting the failure within ten days after written notice.
Additionally, non-compliance includes instances where the franchisee generally fails to pay debts as they become due, admits insolvency, has liabilities exceeding assets, or makes a general assignment for the benefit of creditors. These detailed criteria provide clarity for franchisees regarding what actions or omissions could jeopardize their franchise agreement with Sonesta Simply Suites.