Is the Sonesta Simply Suites Guaranty and Assumption of Obligations continuing and irrevocable?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Each of the undersigned consents and agrees that: (1) his or her direct and immediate liability under this Guaranty will be joint and several, both with Franchisee and among other guarantors; (2) he or she will render any payment or performance required under the Agreements upon demand if Franchisee fails or refuses punctually to do so; (3) this liability will not be contingent or conditioned upon our pursuit of any remedies against Franchisee or any other person; (4) this liability will not be diminished, relieved, or otherwise affected by any extension of time, credit, or other indulgence which we may from time to time grant to Franchisee or to any other person, including, without limitation, the acceptance of any partial payment or performance or the compromise or release of any claims, none of which will in any way modify or amend this Guaranty, which will be continuing and irrevocable during the term of the Agreements; (5) this liability will continue unchanged by the occurrence of any bankruptcy with respect to Franchisee or any assignee or successor of Franchisee, and his or her obligations to make payment or render performance in accordance with the terms of this undertaking nor any remedy for enforcement shall be impaired, modified, changed, released or limited in any manner whatsoever by any impairment, modification, change, release or limitation of the liability of Franchisee or its estate in bankruptcy or of any remedy for enforcement, resulting from the operation of any present or future provision of the U.S. Bankruptcy Act or other statute, or from the decision of any court or agency; and (6) at our request, the undersigned shall present updated financial information to us as reasonably necessary to demonstrate his or her ability to satisfy the financial obligations of Franchisee under the Agreements.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to the 2025 Sonesta Simply Suites Franchise Disclosure Document, the Guaranty and Assumption of Obligations includes a clause stating that the liability of the guarantor will be continuing and irrevocable during the term of the Agreements. This means that the guarantor's obligations remain in effect throughout the duration of the franchise agreement.
This clause has significant implications for potential Sonesta Simply Suites franchisees, particularly those who are entities requiring owners to provide a personal guarantee. The guarantor cannot withdraw from their obligations during the term of the agreement, providing Sonesta Simply Suites with a consistent assurance of financial backing. This irrevocability protects Sonesta Simply Suites against changes in the franchisee's financial situation or business structure.
Furthermore, the guarantor's liability is not contingent upon Sonesta Simply Suites pursuing remedies against the franchisee first. The guarantor is directly and immediately liable, jointly and severally, with the franchisee and other guarantors. This ensures that Sonesta Simply Suites can seek recourse directly from the guarantor without delay, streamlining the process of recovering any outstanding payments or ensuring performance under the franchise agreement. The guarantor's obligations also extend to covering any breaches of the agreement, including non-competition, confidentiality, and transfer requirements.
It is important for potential Sonesta Simply Suites franchisees and their guarantors to fully understand the implications of this continuing and irrevocable guarantee. They should seek legal counsel to assess the risks and obligations associated with providing such a guarantee, as it represents a significant financial commitment throughout the term of the franchise agreement.