What constitutes a 'transfer' of interest in the Sonesta Simply Suites franchise agreement?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Accordingly, neither this Agreement (or any interest in this Agreement), your Hotel or substantially all its assets, any direct or indirect ownership interest in you (regardless of its size), nor any ownership interest in any of your owners (if such owners are legal entities) may be transferred without our prior written approval, which consent will not be unreasonably withheld or delayed. You further agree that you will not enter into any proposed mortgage, pledge, hypothecation, encumbrance or giving of a security interest in or which affects your Hotel, this Agreement, or your rights under this Agreement without our prior written consent. A transfer of your Hotel ownership, possession, or control, or substantially all its assets, may be made only with a transfer of this Agreement. Any transfer, or attempt to transfer, without our approval is a breach of this Agreement and has no effect. In this Agreement, the term "transfer" includes a voluntary, involuntary, direct, or indirect assignment, sale, gift, or other disposition of any interest in:
- (1) this Agreement;
- (2) you;
- (3) your Hotel or substantially all its assets; or
- (4) your owners (if such owners are legal entities).
An assignment, sale, gift, or other disposition includes the following events:
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, a 'transfer' encompasses a broad range of transactions related to the franchise agreement, the franchisee, the hotel, or the owners of the franchisee. Sonesta Simply Suites requires prior written approval for any transfer, and such consent will not be unreasonably withheld or delayed. Any transfer or attempt to transfer without approval constitutes a breach of the agreement and has no effect.
Specifically, the term 'transfer' includes any voluntary, involuntary, direct, or indirect assignment, sale, gift, or other disposition of any interest in the franchise agreement itself, the franchisee entity, the hotel or substantially all of its assets, or the owners of the franchisee if those owners are legal entities. This broad definition ensures that any change in control or ownership of the franchise or its assets is subject to the franchisor's review and approval.
For a prospective Sonesta Simply Suites franchisee, this means that any plan to sell the business, transfer ownership to family members, or even bring in new partners will require the franchisor's consent. While the franchisor agrees not to unreasonably withhold consent, franchisees should be prepared for a review process and potential conditions or requirements associated with the transfer. This provision protects the integrity of the Sonesta Simply Suites brand by ensuring that any new owner or operator meets the franchisor's standards and is capable of maintaining the quality and reputation of the hotel.