What are the damages for unauthorized opening of a Sonesta Simply Suites hotel?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS (Note 1) |
|---|---|---|---|
| Default Remedies | You shall reimburse us for all our costs and expenses we incur to remedy your default. | Case by case basis as incurred | Our expenses may include attorneys' fees (including fees for in-house attorneys), court costs and non-legal fees reasonably incurred to protect us, our subsidiaries, or affiliates or to remedy your default. |
| Lost Revenue Damages | Lost Revenue Damages shall be calculated as follows: (1) the lesser of 36 or the number of full and partial calendar months remaining in the Term, multiplied by (2) the aggregate of the Royalty fee and Brand Promotion Fee percentages, multiplied by (3) the average monthly Gross Rooms Revenue of your Hotel during the 36 full calendar months immediately preceding the last date of regular operations of your Hotel; provided, that if, as of such date, your Hotel has not been operating for at least 36 months, the average monthly Gross Rooms Revenue shall be based on the average Gross Rooms Revenue of your Hotel for all full calendar months during the period commencing on the Opening Date and ending as of the last full calendar month immediately preceding the last date of regular operations of your Hotel. | Within 15 days after date of termination | If we terminate the Franchise Agreement because of your default or if you terminate the Franchise Agreement without cause, you must pay us the Lost Revenue Damages as liquidated damages. You also must pay us the Lost Revenue Damages if your Hotel closes due to fire or other casualty, and either of us elects to termin |
Source: Item 6 — OTHER FEES (FDD pages 25–36)
What This Means (2025 FDD)
According to Sonesta Simply Suites' 2025 Franchise Disclosure Document, if the Franchise Agreement is terminated due to the franchisee's default or if the franchisee terminates the agreement without cause, the franchisee must pay Lost Revenue Damages to Sonesta Simply Suites as liquidated damages. The franchisee must also pay Lost Revenue Damages if the hotel closes due to fire or other casualty, and either party elects to terminate. These damages are payable within 15 days after the termination date.
The Lost Revenue Damages are calculated by multiplying three factors: (1) the lesser of 36 or the number of full and partial calendar months remaining in the Term, (2) the aggregate of the Royalty fee and Brand Promotion Fee percentages, and (3) the average monthly Gross Rooms Revenue of the hotel during the 36 full calendar months immediately preceding the last date of regular operations. If the hotel has not been operating for at least 36 months as of that date, the average monthly Gross Rooms Revenue will be based on the average Gross Rooms Revenue for all full calendar months during the period commencing on the Opening Date and ending as of the last full calendar month immediately preceding the last date of regular operations.
In addition to Lost Revenue Damages, the franchisee is responsible for reimbursing Sonesta Simply Suites for all costs and expenses incurred to remedy the default. These expenses may include attorneys' fees (including fees for in-house attorneys), court costs, and non-legal fees reasonably incurred to protect Sonesta Simply Suites, its subsidiaries, or affiliates, or to remedy the franchisee's default. These default remedy costs are determined on a case-by-case basis as they are incurred.