For a Sonesta Simply Suites franchise, what personnel are franchisees required to obtain non-compete covenants from?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of the Franchise Agreement, you may not engage in a Competitive Business (defined below). You must obtain similar covenants from the personnel we specify, including officers, directors, managers, and other employees attending our training program or having access to Confidential Information. However, we do not require you (or your Principal, if you are a legal entity) or the Management Company to sign an agreement not to compete with us after expiration or termination of the Franchise Agreement. You may not use, copy, or disclose any Confidential Information, other than as necessary to operate your Hotel during the term of the Franchise Agreement. We reserve the right to require that any employee, agent, or independent contractor that you hire execute a non-disclosure agreement to protect the Confidential Information. We reserve the right to regulate the form of non-disclosure agreement that you use and to be a third-party beneficiary of those agreements with independent enforcement rights.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 65–66)
What This Means (2025 FDD)
According to the 2025 Sonesta Simply Suites Franchise Disclosure Document, franchisees must obtain non-compete covenants from specific personnel. These personnel include officers, directors, managers, and other employees who attend Sonesta Simply Suites' training program or have access to confidential information.
However, the FDD specifies that neither the franchisee (or their Principal, if the franchisee is a legal entity) nor the Management Company is required to sign an agreement not to compete with Sonesta Simply Suites after the expiration or termination of the Franchise Agreement. This indicates that the non-compete obligations are primarily focused on individuals who are directly involved in the day-to-day operations and have access to sensitive business information during the term of the franchise agreement.
Sonesta Simply Suites also reserves the right to require any employee, agent, or independent contractor hired by the franchisee to execute a non-disclosure agreement to protect confidential information. The franchisor retains the right to regulate the form of this non-disclosure agreement and to be a third-party beneficiary with independent enforcement rights. This ensures that Sonesta Simply Suites can directly enforce these confidentiality obligations, providing an additional layer of protection for its proprietary information.