Does Sonesta Simply Suites have to give reasonable consideration to a franchisee's request for a transfer?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. Conditions for Approval of Transfer. If you (and your owners) are in full compliance with this Agreement, then you may request our consent to a proposed transfer. We will give your request reasonable consideration but may condition our consent on compliance with certain requirements, including the following:
- (1) you have paid all Royalty and Brand Promotion Fee payments, and other amounts owed to us, our affiliates, and third-party vendors and have submitted all required reports and statements:
- (2) you have not violated any provision of this Agreement, the Lease, or any other agreement with us during both the 60-day period before you requested our consent to the transfer and the period between your request and the effective date of the transfer, nor have you received a notice of termination from us;
- (3) neither the transferee nor its owners (if the transferee is an Entity) or affiliates have an ownership interest (direct or indirect) in or perform services for a Competitive Business;
- (4) you provide us all information or documents we request about the proposed transfer, the transferee, and its owners;
- (5) the transferee completes to our satisfaction any training, brand introduction and/or orientation program that we require at the time of the transfer;
- (6) your landlord, if applicable, allows you to transfer the Lease or sublease the Premises to the transferee:
- (7) the transferee agrees (if the transfer is of this Agreement) to meet with us at our request, either virtually or in person, to conduct an inspection of the Premises and develop a PIP for necessary upgrades, remodeling, and refurbishment of your Hotel and your Hotel's FF&E in
accordance with our then-current requirements and specifications for Brand Hotels, and complete the Renovation Work therein within 120 days after the effective date of the transfer;
- (8) the transferee, at our request, signs our then current form of franchise agreement and related documents, any and all of the provisions of which may differ materially from any and all of those contained in this Agreement;
- (9) The transferee shall demonstrate to our satisfaction that the transferee meets our then-current standards for a new franchisee, including educational, managerial, and business standards; possesses a good moral character, business reputation, and credit rating; has the aptitude and ability to operate your Hotel; and has sufficient equity capital to operate your Hotel;
- (10) you or the transferee pays us a transfer fee equal to the Initial Fee, as provided in Section 3.A of this Agreement. However, no transfer fee is due if, upon a spouse's death, that spouse's interest in this Agreement and your Hotel, or ownership in you, is transferred to the surviving spouse, provided that such transfer is subject to the terms and conditions of this Section 12;
- (11) you (and your transferring owners) sign a general release, in a form satisfactory to us, of any and all claims against us and our affiliates and our and their owners, officers, directors, employees, and agents;
- (12) you and your owners agree that all the transferee's obligations under promissory notes, agreements, or security interests reserved in your Hotel are subordinate to the transferee's obligation to pay Royalty, Brand Promotion Fees, and other amounts due to us, our affiliates, and third-party vendors and otherwise to comply with this Agreement; and
- (13) you and your transferring owners will not directly or indirectly at any time or in any manner (except with respect to other Network Hotels you own and operate) identify yourself or themselves or any business as a current or former Hotel or as one of our franchisees; use any Mark, any colorable imitation of a Mark, or other indicia of a Brand Hotel in any manner or for any purpose; or utilize for any purpose any trade name, trade or service mark, or other commercial symbol that suggests or indicates a connection or association with us.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, Sonesta Simply Suites will give reasonable consideration to a franchisee's request for a transfer if the franchisee (and their owners) are in full compliance with the Franchise Agreement. However, Sonesta Simply Suites may require the franchisee to meet certain conditions to approve the transfer.
These conditions include ensuring all Royalty and Brand Promotion Fee payments and other amounts owed to Sonesta Simply Suites, its affiliates, and third-party vendors are paid, and all required reports and statements have been submitted. The franchisee must not have violated any provision of the Franchise Agreement, the Lease, or any other agreement with Sonesta Simply Suites during the 60-day period before requesting consent to the transfer and the period between the request and the effective date of the transfer, and must not have received a notice of termination from Sonesta Simply Suites.
Additional conditions include that the transferee (and its owners or affiliates) must not have an ownership interest in or perform services for a Competitive Business. The franchisee must provide all requested information or documents about the proposed transfer, the transferee, and its owners. The transferee must also complete any required training, brand introduction, or orientation program to Sonesta Simply Suites's satisfaction. If applicable, the landlord must allow the transfer of the Lease or sublease of the Premises to the transferee. The transferee must agree to meet with Sonesta Simply Suites to conduct an inspection of the Premises and develop a Property Improvement Plan (PIP) for necessary upgrades, remodeling, and refurbishment of the hotel.
Furthermore, the transferee must agree to meet Sonesta Simply Suites's then-current brand standards and complete the renovation work within 120 days after the transfer's effective date. The transferee may also be required to sign Sonesta Simply Suites's then-current form of franchise agreement and related documents, which may differ materially from the original agreement. The transferee must demonstrate that they meet Sonesta Simply Suites's standards for a new franchisee, including educational, managerial, and business standards, and possess a good moral character, business reputation, and credit rating. The transferee must also have the aptitude and ability to operate the hotel and sufficient equity capital. The franchisee or the transferee must pay a transfer fee equal to the Initial Fee, unless the transfer is to a surviving spouse upon death. Finally, the franchisee (and transferring owners) must sign a general release of any and all claims against Sonesta Simply Suites and its affiliates, and agree not to identify themselves as a current or former franchisee or use any of Sonesta Simply Suites's Marks.