Does the Sonesta Simply Suites Franchise Agreement mention interest on late payments?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
I. Interest on Late Payments. If any amount due from you hereunder is not paid when due, such non-payment will constitute a material breach of this Agreement. In addition, we may assess a late payment charge of 1.5% per month or the maximum amount permitted by applicable law, whichever is less, on the unpaid amount beginning on the first day following the due date. Should we engage legal counsel or other professionals in connection with any failure by you to pay when due any monies owed under this Agreement or submit when due any reports, information or supporting records, or in connection with any failure otherwise to comply with this Agreement, you will reimburse us on demand for all the above-listed costs and expenses we incur, whether or not a legal action or other proceeding is initiated. You
acknowledge that this Section 3.I is not our agreement to accept any payments after they are due or our commitment to extend credit to, or otherwise finance your operation of, your Hotel.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to the 2025 Sonesta Simply Suites Franchise Disclosure Document, the Franchise Agreement addresses interest on late payments. It specifies that failure to pay amounts when due constitutes a material breach of the agreement. In the event of late payment, Sonesta Simply Suites may assess a charge of 1.5% per month on the unpaid amount, or the maximum amount permitted by applicable law, whichever is less. This charge begins accruing on the first day following the due date.
Furthermore, if Sonesta Simply Suites incurs costs by engaging legal counsel or other professionals due to the franchisee's failure to pay or comply with the agreement, the franchisee is obligated to reimburse Sonesta Simply Suites for all associated costs and expenses. This reimbursement is required whether or not a legal action is initiated.
The Franchise Agreement explicitly states that this late payment clause does not constitute an agreement by Sonesta Simply Suites to accept late payments or to extend credit to the franchisee. This is a fairly standard practice in franchising, as franchisors need to ensure timely payments to maintain their own financial stability and operational efficiency. Franchisees should be aware of these terms and ensure timely payments to avoid penalties and potential legal repercussions.