Does the Sonesta Simply Suites franchisee need approval to transfer their Hotel ownership?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. By You. You acknowledge and agree that the rights and duties this Agreement creates are personal to you (or to your owners if you are an Entity) and that we have granted you the Franchise in reliance upon our perceptions of your (or your owners') individual or collective character, skill, aptitude, attitude, business ability, and financial capacity. Accordingly, neither this Agreement (or any interest in this Agreement), your Hotel or substantially all its assets, any direct or indirect ownership interest in you (regardless of its size), nor any ownership interest in any of your owners (if such owners are legal entities) may be transferred without our prior written approval, which consent will not be unreasonably withheld or delayed. You further agree that you will not enter into any proposed mortgage, pledge, hypothecation, encumbrance or giving of a security interest in or which affects your Hotel, this Agreement, or your rights under this Agreement without our prior written consent. A transfer of your Hotel ownership, possession, or control, or substantially all its assets, may be made only with a transfer of this Agreement. Any transfer, or attempt to transfer, without our approval is a breach of this Agreement and has no effect. In this Agreement, the term "transfer" includes a voluntary, involuntary, direct, or indirect assignment, sale, gift, or other disposition of any interest in:
- (1) this Agreement;
- (2) you;
- (3) your Hotel or substantially all its assets; or
- (4) your owners (if such owners are legal entities).
An assignment, sale, gift, or other disposition includes the following events:
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, franchisees must obtain prior written approval from Sonesta Simply Suites to transfer their Hotel ownership. This requirement extends to the franchise agreement itself, the Hotel, its assets, or any direct or indirect ownership interest in the franchisee. Sonesta Simply Suites emphasizes that the rights and duties created by the franchise agreement are personal to the franchisee, and the franchise was granted based on the franchisor's assessment of the franchisee's character, skills, and financial capacity. Any transfer without prior approval constitutes a breach of the agreement and is considered ineffective.
The term 'transfer' encompasses various scenarios, including voluntary, involuntary, direct, or indirect assignments, sales, gifts, or other dispositions of interest in the franchise agreement, the franchisee entity, the Hotel, or the owners of the franchisee. This broad definition ensures that any change in ownership or control is subject to Sonesta Simply Suites's review and approval.
Sonesta Simply Suites may condition its approval on compliance with specific requirements. These conditions include ensuring that all outstanding payments and reports are up-to-date, no violations of the franchise agreement have occurred, the transferee does not have an interest in a competitive business, and the transferee meets the franchisor's current standards for new franchisees. The transferee may also be required to complete training, conduct renovations, and sign the then-current form of the franchise agreement. A transfer fee, equivalent to the initial fee, is typically required unless the transfer is to a surviving spouse upon death, subject to certain terms and conditions. These stipulations are in place to protect the Sonesta Simply Suites brand and maintain consistency across all franchised locations.