What is the current Brand Promotion Fee that Sonesta Simply Suites franchisees are required to pay?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
ughout the term of the Franchise Agreement.
Advertising and Marketing
Brand Promotion
We and our affiliates have established a brand promotion program for all Network Hotels. We and our affiliates reserve the right to separate the brand promotion program into separate brand promotion programs for each brand or any combination of brands we and they determine, or to consolidate the brand promotion program with the brand promotion program of other brands we or our affiliates maintain so that we maintain and administer one brand promotion program for all brands or any combination of brands as we determine. Currently we require franchisees to pay a Brand Promotion Fee equal to 3.5% of Gross Rooms Revenue. However, we may increase the Brand Promotion Fee, but the Brand Promotion Fee will not exceed 4.5% of Gross Rooms Revenue. Brand Hotels that we or our affiliates own or manage may not pay us the Brand Promotion Fee on the same percentage basis as franchisees.
We or our affiliates or other designees may use some or all of the Brand Promotion Fees, in conjunction with other Network Hotels' contributions or promotional fees, to pay for various expenses and programs that, in our view, benefit, in the short-term or the long-term, the Brand Hotels or any or all of the Network Hotels worldwide. These programs and expenditures may include but are not limited to: preparing and producing video, audio, and written materials and digital media; developing, implementing, and maintaining a franchise system website and related strategies; administering international, national, regional and multi-regional marketing and advertising programs, including purchasing trade journal, direct mail, and other media advertising and using advertising, promotion, and marketing agencies and other advisors to provide
assistance; administering online advertising and marketing campaigns (including search engine, social media, email, and display ad campaigns); developing and administering software, apps, and related integrations; implementing and supporting the loyalty program or other marketing programs designed to encourage the patronage of Network Hotels; supporting public relations, market research, and other advertising, promotion, and marketing activities; participating in travel industry trade shows, operating a global sales department, which activities include group sales, business-to-business, transient, leisure and specialty markets; and such other uses as we deem appropriate for the promotion of Network Hotels and further developing the reputation and image of Network Hotels. We and our affiliates have sole discretion to determine how we spend these fees, including sole control over the creative concepts, materials, endorsements, and media used in the programs, the geographic market in which we and they place any media and allocation of advertising. We or our affiliates may enter into arrangements for development, marketing, operations, administrative, technical and support functions, facilities, programs, services, and personnel with any other entity, including our affiliates. The Brand Promotion Fee does not cover your cost of participating in any optional marketing programs and promotions we may offer.
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 brand promotion programs, including conducting market research, public relations, preparing advertising, promotion, and marketing materials, and collecting and accounting for Brand Promotion Fees. Brand Promotion Fees will not be used principally to solicit new franchise sales.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 48–60)
What This Means (2025 FDD)
According to the 2025 Sonesta Simply Suites FDD, franchisees are currently required to pay a Brand Promotion Fee. This fee is set at 3.5% of Gross Rooms Revenue. This fee contributes to the brand promotion program established for all Network Hotels. However, Sonesta Simply Suites retains the right to modify this fee, with a maximum allowable increase up to 4.5% of Gross Rooms Revenue. It's also important to note that the percentage basis for Brand Promotion Fees may differ between franchised hotels and those owned or managed by Sonesta Simply Suites or its affiliates.
The Brand Promotion Fees collected are used for various expenses and programs aimed at benefiting the Brand Hotels or any or all of the Network Hotels worldwide. These include creating promotional materials, maintaining the franchise system website, administering marketing programs, supporting public relations, participating in trade shows, and operating a global sales department. Sonesta Simply Suites has sole discretion in determining how these fees are spent, including control over creative concepts, media usage, and market allocation.
Sonesta Simply Suites also has the option to defer or reduce a franchisee's payment of Brand Promotion Fees. They can also reduce or suspend Brand Promotion Fee payments and programs for which they use such payments for one or more periods of any length and terminate (and, if terminated, reinstate) such programs, provided they give 30 days' prior notice. In 2024, the Brand Promotion Fees were allocated as follows: 42% for media placement, 38% for production, 7% for administrative expenses, and 13% for other purposes, such as supporting the global sales program.