What is the deadline for paying the monthly royalty fee for a Sonesta Simply Suites franchise?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- for onboarding services we provide to you in connection with the opening of your Hotel as a Brand Hotel. This fee is non-refundable and is due during or immediately after the onboarding process.
- C. Royalty Fee. Beginning on the earlier of (a) the Opening Date, or (b) the date you begin operating your Hotel under the Marks, you will pay to us via ACH in U.S. dollars on or before the twentieth (20th) day of each month, including the final month of the Term, a monthly royalty fee in the amount of 5% of Gross Rooms Revenue, as defined below, accruing during the preceding calendar month (the "Royalty"). You will pay us the Royalty in the manner provided below (or as the Brand Manual otherwise prescribes).
- Definition of "
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites' 2025 Franchise Disclosure Document, the monthly royalty fee, which is 5% of Gross Rooms Revenue, must be paid via ACH in U.S. dollars on or before the 20th day of each month, including the final month of the term. The revenue used to calculate the royalty is based on the preceding calendar month.
This means that as a Sonesta Simply Suites franchisee, you are responsible for ensuring that the royalty payment is submitted and received by the franchisor by the 20th of each month. The payment must be made via ACH (Automated Clearing House), which is an electronic funds transfer system. The amount due is calculated from the gross room revenue generated in the previous month.
Missing the royalty payment deadline could result in penalties or a breach of the franchise agreement. Franchisees should set up systems to accurately track gross room revenues and schedule timely payments to avoid any issues. The FDD specifies that failure to pay monthly fees constitutes a material default under the Franchise Agreement.