What is the effect of the covenant not to sue included in the Sonesta Simply Suites franchisee release?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Consistent with the previous introduction, you, on your own behalf and on behalf of your current and former parents, affiliates, and subsidiaries, and your and each of the foregoing person's or entity's respective agents, spouses, heirs, executors, administrators, principals, attorneys, partners, owners, officers, directors, employees, representatives, predecessors, successors, and assigns (collectively, the "Releasing Parties"), hereby fully and forever unconditionally release and discharge us and our current and former parents, subsidiaries, and affiliates, and our and each of such foregoing entity's respective current and former owners, officers, directors, employees, managers, agents, representatives, predecessors, successors, and assigns (collectively, the "Sonesta RL Parties") of and from any and all claims, demands, causes of action, suits, duties, obligations, actions, liabilities, defenses or damages of every kind and nature whatsoever (collectively, "Claims") whether at law or in equity, and known or unknown, that any of the Releasing Parties now has, ever had, or, but for this document, hereafter would or could have against any of the Sonesta RL Parties, including, without limitation, Claims arising out of or relating to any relationship or transaction with any of the Sonesta RL Parties, however characterized or described, from the beginning of time until the date of your signature below, including, without limitation, any and all Claims in any way arising out of or relating to the Franchise Agreement, the relationship created by the Franchise Agreement, or the development, ownership, or operation of your Hotel that you operate under the Franchise Agreement. You, on behalf of yourself and the other Releasing Parties, further covenant not to sue any of the Sonesta RL Parties on any of the Claims released by this paragraph, and warrant and represent that the Releasing Parties have not assigned or otherwise transferred any Claims released by this paragraph.
Source: Item 23 — RECEIPTS (FDD pages 80–246)
What This Means (2025 FDD)
According to the 2025 Sonesta Simply Suites FDD, a franchisee, as part of a release agreement, agrees not to sue Sonesta RL Parties, which includes Sonesta Simply Suites and its parents, subsidiaries, affiliates, owners, officers, directors, employees, managers, agents, representatives, predecessors, successors, and assigns. This covenant prevents the franchisee and related parties from initiating any legal action against Sonesta Simply Suites regarding any claims, demands, causes of action, suits, duties, obligations, actions, liabilities, defenses, or damages related to their franchise agreement or relationship. This includes both known and unknown claims from the beginning of time until the date the release is signed.
The covenant not to sue extends to any relationship or transaction with Sonesta RL Parties, including those arising from the Franchise Agreement, the relationship it creates, or the development, ownership, or operation of the franchisee's hotel. The franchisee also warrants that they have not assigned or transferred any claims that are being released. This ensures that Sonesta Simply Suites is protected from future litigation related to past events or the ongoing franchise relationship.
However, the FDD also includes some state-specific addenda that may limit the scope of the release and covenant not to sue. For example, in California, franchisees waive their rights under Section 1542 of the California Civil Code, which typically protects against releasing unknown claims unless expressly waived. In Maryland, the release does not apply to liabilities under the Maryland Franchise Registration and Disclosure Law. These state-specific provisions highlight the importance of franchisees understanding the specific legal implications of the release in their jurisdiction and consulting with legal counsel.