What are the Disbursement Conditions that must be met to receive the financial contribution from Sonesta Simply Suites?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Disbursement.
Subject to the terms and conditions of the Agreement and this Note, Holder has agreed to provide a financial contribution to Maker in the principal amount of this Note to assist Maker with the development or conversion of the Hotel to a Brand Hotel.
The Principal will be distributed to Maker ([each, a] "Disbursement") [within forty-five (45) days after the Opening Date] [in installments as of the dates set forth on Schedule A hereto] subject to the Disbursement Conditions. "Disbursement Conditions" shall mean, with respect to and as of the date of each Disbursement, if applicable, Maker has opened and is operating the Hotel in accordance with the Agreement; Maker and each of its guarantor's creditworthiness and financial condition is satisfactory to Holder in Holder's sole discretion; from the Opening Date through such Disbursement, there has been no material adverse change to the Hotel (including, but not limited to a decrease in Guest Rooms); Maker is in compliance with the terms and conditions of the Agreement, this Note, and any other agreement between Maker and Holder or its affiliates; and all required parties have executed a guaranty in a form acceptable to Holder.
Source: Item 23 — RECEIPTS (FDD pages 80–246)
What This Means (2025 FDD)
According to the 2025 FDD, Sonesta Simply Suites provides a financial contribution to assist with the development or conversion of a hotel to a Sonesta Simply Suites branded hotel. However, this contribution is subject to certain Disbursement Conditions. These conditions must be met for the franchisee to receive the funds.
The Disbursement Conditions include the franchisee opening and operating the hotel in accordance with the franchise agreement. Additionally, the creditworthiness and financial condition of both the franchisee and any guarantors must be satisfactory to Sonesta Simply Suites, at their sole discretion. There must be no material adverse change to the hotel from the opening date through the disbursement date, including a decrease in the number of guest rooms.
Furthermore, the franchisee must be in full compliance with the terms and conditions of the franchise agreement, the promissory note related to the financial contribution, and any other agreements between the franchisee and Sonesta Simply Suites or its affiliates. Finally, all required parties must have executed a guaranty in a form acceptable to Sonesta Simply Suites. Meeting these conditions ensures that the franchisee is operating the hotel as agreed and that Sonesta Simply Suites's investment is protected.