May a Sonesta Simply Suites franchisee periodically pay Sonesta Simply Suites for purchases from designated third parties?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
icly-held companies that are suppliers to Brand Hotels.
Neither we nor any of our affiliates currently is an Approved Supplier, although we may designate ourselves or an affiliate as an Approved Supplier (including as an exclusive supplier). You periodically may pay us for purchases from designated third parties.
If you want to purchase goods or services from an unapproved supplier, then you may submit a written request for us to approve the supplier.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 42–46)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, a franchisee may periodically pay Sonesta Simply Suites for purchases made from designated third parties. This indicates that Sonesta Simply Suites may act as an intermediary for certain transactions between the franchisee and approved suppliers.
This arrangement could streamline the purchasing process for franchisees, as they would make payments directly to Sonesta Simply Suites rather than managing multiple vendor relationships. It also suggests that Sonesta Simply Suites may negotiate favorable terms with suppliers on behalf of its franchisees, potentially leading to cost savings or other benefits.
However, it's important for prospective franchisees to understand the specific terms and conditions of these arrangements. This includes knowing which purchases are subject to this payment process, the reasons for using Sonesta Simply Suites as an intermediary, and whether there are any additional fees or markups associated with these transactions. Franchisees should also clarify how these payments are accounted for and reconciled to ensure transparency and accuracy.
It is also important to note that the FDD states that Sonesta Simply Suites has the right to require the platform or Approved Suppliers to charge the franchisee a 2% to 3% procurement fee, which would be remitted to them, but they currently do not require them to charge such a fee.