What form is used for the guaranty that owners must execute for a Sonesta Simply Suites franchise?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) If you are an Entity, each of your direct and indirect owners, with a twenty percent (20%) or more ownership interest in you, during the Term will execute a guaranty in the form we prescribe undertaking personally to be bound, jointly and severally, by all provisions of this Agreement and any ancillary agreements between you and us.
Our current form of guaranty is attached hereto as Exhibit C.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to the 2025 Sonesta Simply Suites Franchise Disclosure Document, if the franchisee is an entity, each direct and indirect owner with a 20% or more ownership interest must execute a guaranty. The specific form that Sonesta Simply Suites prescribes for this guaranty is attached to the Franchise Agreement as Exhibit C.
Exhibit C is titled "Guaranty and Assumption of Obligations". This agreement stipulates that the owners personally and unconditionally guarantee that the franchisee will fulfill all obligations outlined in the Franchise Agreement, including financial and operational responsibilities. This obligation extends for the entire term of the agreement and beyond, as specified within the agreement itself.
By signing this guaranty, the owners agree to be personally bound by and liable for any breaches of the Franchise Agreement. This includes monetary obligations, actions that must be taken or avoided, and adherence to non-competition, confidentiality, and transfer requirements. This ensures that Sonesta Simply Suites has recourse to the personal assets of the owners should the franchisee entity fail to meet its obligations.