What is the effect of accepting payments due from the franchisee after a breach of the Sonesta Simply Suites agreement?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Waiver of Obligations. We and you may by written instrument unilaterally waive or reduce any obligation of or restriction upon the other under this Agreement, effective upon delivery of written notice to the other or another effective date stated in the notice of waiver. Any waiver granted will be without prejudice to any other rights we or you have, will be subject to continuing review, and may be revoked at any time and for any reason effective upon delivery of 10 days' prior written notice. We and you will not waive or impair any right, power, or option this Agreement reserves (including our right to demand exact compliance with every term, condition, and covenant or to declare any breach to be a default and to terminate this Agreement before its term expires) because of any custom or practice at variance with this Agreement's terms; our or your failure, refusal, or neglect to exercise any right under this Agreement or to insist upon the other's compliance with this Agreement, including any Brand Standard; our waiver of or failure to exercise any right, power, or option, whether of the same, similar, or different nature, with other Brand Hotels; the existence of franchise agreements for other Brand Hotels which contain provisions different from those contained in this Agreement; or our acceptance of any payments due from you after any breach of this Agreement. No special or restrictive legend or endorsement on any check or similar item given to us will be a waiver, compromise, settlement, or accord and satisfaction. We are authorized to remove any legend or endorsement, which then will have no effect.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, accepting payments from a franchisee after a breach of the franchise agreement does not prevent Sonesta Simply Suites from enforcing the terms of the agreement. Sonesta Simply Suites retains all rights, powers, and options reserved in the agreement, including the right to demand exact compliance with every term, condition, and covenant. They can still declare a breach to be a default and terminate the agreement before its term expires, regardless of accepting payments after the breach.
This means that even if a Sonesta Simply Suites franchisee is behind on payments or violates another term of the agreement, and Sonesta Simply Suites accepts a payment from them, Sonesta Simply Suites does not waive its right to take action on the original breach. This protects Sonesta Simply Suites's ability to enforce its franchise agreement and maintain brand standards across all locations.
This policy is common in franchising, as franchisors need to maintain consistent standards and cannot allow breaches to go unaddressed. The clause ensures that Sonesta Simply Suites can work with franchisees to resolve issues without giving up its right to terminate the agreement if the issues are not resolved. Franchisees should be aware that any payment made after a breach does not excuse the breach itself.