For Sonesta Simply Suites, what constitutes an 'Event of Default' that could lead to termination of the Franchise Agreement?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
liver them to us for acceptance and execution (together with the renewal fee) within 30 days after their delivery to you to be an election not to acquire a successor franchise.
14. TERMINATION OR SUSPENSION OF AGREEMENT.
- A. Termination or Suspension by Us on Advance Notice. Except in the case of an immediate termination as provided in Section 14.B below, we have the right to terminate this Agreement if you fail to cure an Event of Default within 30 days after we furnish notice of default to you based on the Event of Default, or, if there is a non-monetary Event of Default that is incapable of cure within 30 days, if you fail to diligently pursue cure of such default and fail to cure the default within the additional time periods we set forth in the notice of default.
- (1) An "Event of Default" will occur if you fail to satisfy or comply with any of the obligations, requirements, conditions, or terms set forth in (i) this Agreement, the Brand Standards (including the minimum performance scores required by the Brand Manual), or any attachment to this Agreement; or (ii) any other agreement you have with us, or an Entity, relating to your Hotel, including, any computer system agreement, or any agreement to manage your Hotel. An "Event
of Default" will also occur if you make any misrepresentations to us, whether in entering into this Agreement, or in the performance of your obligations to us.
- (2) Our notice of termination will not relieve you of your obligations under this Agreement or any of its attachments.
- Upon notice of an Event of Default, we also may at any time, at our sole discretion, suspend our obligations under this Agreement (including Central Reservation Services as more fully described below) and may remove the listing of your Hotel from any directories we publish, and from any advertising we publish, or to remove or suspend you from the Central Reservation System immediately without notice to you, and/or rescind any terms to this Agreement that were negotiated between the parties. We will have the right to divert reservations previously made for your Hotel to other Network Hotels after giving you notice of an Event of Default. If you fully cure the Event of Default within the time provided in our notice, including payment of any amounts accruing to us under this Agreement after the date of our notice, and further including payment of our then applicable administrative fee for resumption of services, we will restore you to the Central Reservation System, and add you to all future directories we publish and to all advertising we subsequently disseminate (except advertising that was ordered before your reinstatement), but we will not be required to redirect to you any reservations previously made for your Hotel and diverted to other Network Hotels during the period of suspension or removal, and you will be entitled to no compensation in connection with our election to suspend or remove your Hotel from our directories, advertising or the Central Reservation System. You agree that our exercise of these rights will not result in actual or constructive termination of this Agreement, and that the rights granted to us in this Section 14.A.(3) are in addition to, and apart from, any other rights we may have in this Agreement, including our right to terminate this Agreement. 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.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites' 2025 Franchise Disclosure Document, an 'Event of Default' can lead to the termination of the Franchise Agreement if the franchisee fails to correct the issue within 30 days after receiving notice from Sonesta Simply Suites. If the default is not related to money and cannot be fixed within 30 days, Sonesta Simply Suites may grant additional time to correct the default, provided the franchisee is actively working to resolve the issue.
An 'Event of Default' occurs if the franchisee does not meet the obligations, requirements, conditions, or terms outlined in the Franchise Agreement, Brand Standards (including minimum performance scores in the Brand Manual), or any attachments to the Franchise Agreement. It also includes non-compliance with any other agreements between the franchisee and Sonesta Simply Suites or an entity related to the hotel, such as a computer system agreement or a management agreement. Furthermore, making misrepresentations to Sonesta Simply Suites, whether when entering the agreement or during the performance of obligations, also constitutes an 'Event of Default'.
Upon notice of an 'Event of Default', Sonesta Simply Suites has the right to suspend its obligations under the agreement, which may include Central Reservation Services. They can also remove the hotel's listing from directories and advertising, or suspend the hotel from the Central Reservation System without prior notice. Additionally, Sonesta Simply Suites can redirect reservations made for the franchisee's hotel to other Network Hotels after notifying the franchisee of the default.
If the franchisee fully corrects the 'Event of Default' within the given timeframe, including paying any owed amounts and an administrative fee for the resumption of services, Sonesta Simply Suites will restore the hotel to the Central Reservation System and include it in future directories and advertising. However, Sonesta Simply Suites is not required to redirect previously diverted reservations back to the franchisee's hotel, and the franchisee is not entitled to compensation for the period of suspension or removal. The exercise of these rights by Sonesta Simply Suites does not constitute a waiver of any breach by the franchisee and does not prevent Sonesta Simply Suites from pursuing other rights under the agreement, including termination.