Are Brand Promotion Fees for Sonesta Simply Suites accounted for separately from other funds?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
We and our affiliates will account for Brand Promotion Fees separately from our other funds, though we are not obligated to maintain them in a separate account. We and our affiliates may use Brand Promotion Fees to reimburse us or our affiliates or designees for the salaries and benefits of personnel who directly or indirectly manage and administer the brand promotion programs, associated administrative costs, travel expenses of personnel while they are on corresponding business, meeting costs, overhead relating to the brand promotion programs, and other expenses that we incur in activities related to administering or directing such programs, including conducting market research, public relations, preparing advertising, promotion, and marketing materials, and collecting and accounting for Brand Promotion Fees.
The brand promotion programs are not a trust and the Brand Promotion Fees do not bear interest. We do not owe any fiduciary obligation to you for administering the brand promotion program or any other reason. We or our affiliates will use Brand Promotion Fees for the purposes described in this Section 9.A. Our spending of the Brand Promotion Fees in any fiscal year may be more or less than the total Brand Promotion Fee payments in that year, and the brand promotion programs may borrow from us or others (paying reasonable interest) to cover deficits, or invest any surplus for future use. We may prepare an annual, unaudited statement of Brand Promotion Fee payments and expenses, and give you a copy of the most recently prepared statement upon your written request to us. We may (but are not obligated to) have our accounts related to Brand Promotion Fees audited annually, which audit may be paid for using Brand
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, the brand promotion fees are accounted for separately from other funds. However, Sonesta Simply Suites is not obligated to maintain these fees in a separate account.
Sonesta Simply Suites and its affiliates can use the Brand Promotion Fees to cover various expenses related to managing and administering brand promotion programs. These expenses include salaries and benefits of personnel, administrative costs, travel expenses, meeting costs, overhead, market research, public relations, advertising, and the collection and accounting of Brand Promotion Fees.
The brand promotion programs are not considered a trust, and the Brand Promotion Fees do not accrue interest. Sonesta Simply Suites does not have a fiduciary obligation to franchisees regarding the administration of the brand promotion program. The spending of Brand Promotion Fees in any fiscal year may be more or less than the total payments received, and the programs may borrow funds or invest any surplus for future use.
Sonesta Simply Suites may prepare an annual, unaudited statement of Brand Promotion Fee payments and expenses, providing a copy upon written request. They may also choose to have their accounts related to Brand Promotion Fees audited annually by an independent certified public accountant, with the audit costs potentially covered by the collected Brand Promotion Fees. Sonesta Simply Suites retains the option to incorporate a brand promotion fund or operate it through a separate entity.