What is the condition regarding the use of the Franchise System in the operation of a Sonesta Simply Suites hotel?

nditions, covenants, agreements, representations, and warranties contained in this Agreement, you and we agree as follows:

1. GRANT OF FRANCHISE; NO EXCLUSIVITY; RESERVATION OF RIGHTS.

A. Grant of Franchise. Subject to this Agreement's terms, we grant you a limited and non-exclusive franchise (the "Franchise") to establish and operate your Hotel under the Franchise System at

the Premises, and to use the Franchise System and the Brand Standards (as defined in Section 2.A) in its operation, for a term beginning on the Opening Date (as defined in Section 2.E) and expiring 20 years from the Opening Date, unless sooner terminated under Section 14 of this Agreement (the "Term").

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;

Source: Item 22 — CONTRACTS (FDD pages 79–80)