Is Sonesta Simply Suites allowed to engage in activities not expressly prohibited by the Franchise Agreement?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree to, at all times, faithfully, honestly, and diligently perform your obligations under this Agreement and to use your best efforts to promote your Hotel. You agree to use the Premises only for your Hotel, and, once it opens for business, to continuously operate your Hotel in accordance with this Agreement for the duration of the Term. You agree not to conduct the business of your Hotel at any location other than the Premises. You may not promote or sell any products or services, whether directly or indirectly, through or on the Internet, the World Wide Web, or any other similar proprietary or common carrier electronic delivery system, except as expressly set forth herein or as set forth in the Brand Manual, as hereinafter defined.
- B. No Exclusivity and Reservation of Rights. We do not grant any, and you have no, exclusive rights or territorial protection around your Hotel.
We (and our affiliates) retain the right at all times during and after the Term to engage in any and all activities that we (and they) deem appropriate and that have not been expressly granted to you in this Agreement, wherever and whenever we (and they) desire, and whether or not such activities compete with your Hotel, including the right, anywhere in the world, to do any of the following:
(1) establish and operate, and allow others to establish and operate Brand Hotels at any location on such terms and conditions we deem appropriate;
(2) establish, operate, and license others to establish and operate, anywhere in the world other than the Premises, Network Hotels and other businesses that offer products and services which are identical or similar to the products and services offered by Brand Hotels under any trade names, trademarks, service marks and commercial symbols;
(3) purchase, merge, acquire, be acquired or affiliate with one or more existing franchise networks, chains or any other businesses, including Competitive Businesses (defined below), regardless of the location of such chains' or businesses' facilities, and to operate, franchise or license those businesses under the Marks or any other marks following the purchase, merger, acquisition or affiliation, regardless of the location of those businesses (or the franchisees or licensees of those businesses);
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites' 2025 Franchise Disclosure Document, the company retains the right to engage in activities not expressly granted to the franchisee in the Franchise Agreement. This means Sonesta Simply Suites has broad discretion over its business operations and can pursue opportunities even if they potentially compete with existing franchisees.
Specifically, Sonesta Simply Suites reserves the right to establish and operate Brand Hotels or allow others to do so at any location, under terms and conditions they deem appropriate. They can also establish, operate, and license Network Hotels and other businesses offering similar products and services as Brand Hotels, excluding the franchisee's premises. Furthermore, Sonesta Simply Suites can purchase, merge, acquire, or affiliate with other franchise networks or businesses, including competitors, and operate them under any marks.
This reservation of rights has significant implications for prospective franchisees. It means that Sonesta Simply Suites can expand its presence and diversify its business without being restricted by the franchisee's interests. While franchisees are expected to use their best efforts to promote their hotels, Sonesta Simply Suites maintains considerable freedom to shape its business strategy, even if it introduces competition or alters the market landscape for individual franchisees. Franchisees should carefully consider this lack of exclusivity and territorial protection before investing in a Sonesta Simply Suites franchise.