What events will cause the Sonesta Simply Suites Note to be accelerated?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
This Note shall be accelerated on the occurrence of any of the following events (each, an "Acceleration Event"): (i) any representation or warranty made in connection with this Note, your application, the Agreement, or in any report or other information later submitted to the Holder that is, in the Holder's opinion, false, misleading or incorrect in any material respect; (ii) termination of the Agreement for any reason; (iii) any breach of the Agreement or this Note, whether Maker is notified of or cures such breach; (iv) transfer of any interest in the Agreement whereby the transferee does not assume Maker's obligation under this Note in a form acceptable to Holder upon transfer; (v) Maker loses ownership or possession of the Premises, or otherwise loses the right to conduct the franchised business at the Hotel; (vi) any ownership interest of the Maker is transferred or conveyed, whether directly or indirectly, or an owner of the Maker enters into an agreement or understanding for such a transfer or conveyance; (vii) if any proceedings for the appointment of a receiver or other custodian or seeking marshaling or composition of or for Maker's business or assets is filed in any court, or otherwise commenced in accordance with applicable law, and is not dismissed within forty-five (45) days; or (viii) any of the events described in this Section 3 occur with respect to any affiliate of the Maker that is a party to an agreement with the Holder.
Should an Acceleration Event occur, the unamortized Principal shall become immediately due and payable without further notice and, if applicable, Maker will have no obligation to make any additional Disbursement.
Source: Item 23 — RECEIPTS (FDD pages 80–246)
What This Means (2025 FDD)
According to the 2025 Sonesta Simply Suites FDD, there are several events that can trigger the acceleration of the Note, meaning the outstanding principal balance becomes immediately due. These Acceleration Events include: any materially false, misleading, or incorrect representation or warranty made in connection with the Note, the franchise application, the Franchise Agreement, or any submitted report; termination of the Franchise Agreement for any reason; any breach of the Franchise Agreement or the Note itself, regardless of whether the franchisee receives notice or cures the breach.
Additional events that can cause acceleration are: transfer of any interest in the Franchise Agreement to a transferee who does not assume the franchisee's obligations under the Note in a form acceptable to Sonesta Simply Suites; the franchisee losing ownership, possession, or the right to conduct the franchised business at the hotel premises; any direct or indirect transfer or conveyance of any ownership interest of the franchisee, or an owner entering into an agreement for such a transfer.
Furthermore, the Note can be accelerated if proceedings for the appointment of a receiver or custodian, or seeking marshaling or composition of the franchisee's business or assets, are filed and not dismissed within 45 days; or if any of these events occur with respect to any affiliate of the franchisee that is a party to an agreement with Sonesta Simply Suites. If any of these Acceleration Events occur, the unamortized principal becomes immediately due and payable without further notice, and the franchisee will have no obligation to make any additional disbursement.