What is the estimated range for Contingencies for a new construction Sonesta Simply Suites franchise?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
TMENT SONESTA SIMPLY SUITES (Note 1) – 100 ROOMS**
| Type Of Expenditure | Amount Conversion | New Construction | Method of Payment | When Due | To Whom Payment Is To Be Made |
|---|---|---|---|---|---|
| Initial Fee (Note 2) | $50,000 | $50,000 | Lump sum | Upon your signing of the Franchise Agreement | Us |
| Onboarding | $2,500 | $2,500 | Lump sum | As arranged | Us |
| Administration Fee | |||||
| (Note 3) | |||||
| Revenue Manage |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT SONESTA SIMPLY SUITES (Note 1) – 100 ROOMS (FDD pages 36–42)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, the estimated range for contingencies for a new construction franchise is $270,000 to $425,000. These funds are earmarked to cover unanticipated construction cost overruns and other unexpected expenses that may arise during the construction phase. These payments are arranged with and made to contractors and suppliers.
Contingency funds are a standard practice in construction and franchising, designed to provide a financial buffer against unforeseen issues. These funds can be used to address problems such as unexpected material price increases, delays due to weather, or necessary modifications to the original construction plans. Without adequate contingency funds, franchisees may face significant financial strain or project delays.
Prospective Sonesta Simply Suites franchisees should carefully evaluate their construction budget and ensure that the contingency amount is sufficient to cover potential risks in their specific location. Factors such as the complexity of the construction project, local market conditions, and the experience of the construction team can all influence the required contingency amount. It would be prudent to discuss with the franchisor and experienced construction professionals to determine an appropriate contingency level for their project.