Does the Sonesta Simply Suites Franchise Agreement outline obligations for new construction?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Background. This Rider is annexed to and forms part of the Franchise Agreement. This Rider is being signed because you are constructing a new Brand Hotel, pursuant to the Franchise Agreement. Capitalized terms used, but not defined, herein shall have the meanings given them in the Franchise Agreement.
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- Interest in Premises. You must deliver to us, before you commence construction, and in any event no later than thirty (30) days after the Effective Date, either a deed reflecting your ownership of the Premises (the "Deed") or a copy of your lease for the Premises that allows you the right to enter into the Franchise Agreement (the "Lease"). If you fail to timely provide us the Deed or Lease, we may immediately terminate the Franchise Agreement. You represent and warrant that, throughout the Term of the Franchise Agreement, you will be entitled to possession of the Premises and your Hotel without restrictions that would interfere with your performance under the Franchise Agreement, subject to the reasonable requirements of any financing secured by your Hotel. You will provide us copies of all documentation reflecting your right to possession of the Premises at any time upon our request. Further, if you do not own the Premises, you must provide us with copies of any amendment, addendum, extension, or other modification to the Lease within five days following execution.
You acknowledge and agree that any of our involvement in the approval of location is for our sole benefit. You further acknowledge that you have been advised to obtain the advice of your own professional advisors in connection with your purchase of the Premises or the Lease, as applicable.
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- Construction Work. You agree to take all action necessary to perform the development and construction of your Hotel, renovation, furnishing, equipping, acquisition of supplies and the implementation of the Plans (as defined below) ("Construction Work") all in accordance with the terms and conditions of the Franchise Agreement, within the time frames that we specify. You will be solely responsible for obtaining all necessary licenses, permits and zoning variances required for the Construction Work. Before you begin the Construction Work, you will submit copies of applicable permits, licenses and zoning variances to us for approval. We may assign you a project manager or onboarding specialist.
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- Plans and Designs. You must submit to us your plans, layouts, specifications, and drawings for your Hotel (collectively, the "Plans"), and your plans, layouts, specifications, and drawings for the proposed furnishings, fixtures, equipment and décor of your Hotel (collectively, the "Designs") with respect to the Construction Work. We may supply you with representative prototype guest room and public area plans and schematic building plans as a guide for preparation of the Plans and Designs. Our approval of such Plans and Designs does not warrant the depth of our analysis or assume any responsibility for the efficacy of the Plans and Designs, or the resulting Construction Work. You acknowledge and agree that you will not rely upon any approval we may provide you for the Plans or Designs for any purpose whatsoever except compliance with our then prevailing Brand Standards.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites' 2025 Franchise Disclosure Document, the Franchise Agreement does include obligations for new construction, detailed in a New Construction Rider (Exhibit D-2).
The New Construction Rider specifies several requirements for franchisees constructing a new Sonesta Simply Suites hotel. Before construction begins, the franchisee must provide Sonesta Simply Suites with either a deed proving ownership of the premises or a lease that allows them to enter into the Franchise Agreement, no later than 30 days after the Effective Date. Failure to provide the deed or lease in a timely manner may result in immediate termination of the Franchise Agreement. The franchisee must also ensure they have the right to possess the premises throughout the term of the agreement without interference, subject to financing requirements.
The franchisee is required to start construction within 12 months of the Effective Date of the Franchise Agreement and complete construction within 18 months of breaking ground, but no later than 30 months from the Effective Date, unless otherwise specified in Exhibit A. The franchisee must obtain all necessary insurance, permits, and certifications for lawful construction, and provide copies to Sonesta Simply Suites upon request. The franchisee must also notify Sonesta Simply Suites upon completion of construction, and Sonesta Simply Suites has the sole right to determine if the construction is completed according to the Franchise Agreement and Brand Standards.
The franchisee cannot open the Sonesta Simply Suites hotel until Sonesta Simply Suites confirms in writing that the construction is completed to their satisfaction. Opening the hotel before authorization constitutes unauthorized use of the Marks and a material breach of the Franchise Agreement. If the franchisee fails to commence construction by the Construction Work Commencement Date, or fails to complete the Construction Work by the Construction Work Completion Date, it will be considered a default under Section 14.B.(2) of the Franchise Agreement.