What happens if a Sonesta Simply Suites franchisee breaches the covenant not to sue?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| sing Inc. ("we," "us," or "our") and the undersigned franchisee, |
|---|
| ("you" or "your"), currently are parties to a certain Franchise Agreement (the "Franchise |
| Agreement") dated |
| , |
| . You have asked us to take the following action |
| or to agree to the following request: [insert as appropriate] |
| We have the right |
| under the Franchise Agreement to obtain a general release from you (and, if applicable, your owners) as a |
| condition of taking this action or agreeing to this request. Therefore, we are willing to take the action or |
| agree to the request specified above if you (and, if applicable, your owners) give us the release and |
| covenant not to sue provided below in this document. You (and, if applicable, your owners) are willing to |
| give us the release and covenant not to sue provided below as partial consideration for our willingness to |
| take the action or agree to the request described above. |
Consistent with the previous introduction, you, on your own behalf and on behalf of your current and former parents, affiliates, and subsidiaries, and your and each of the foregoing person's or entity's respective agents, spouses, heirs, executors, administrators, principals, attorneys, partners, owners, officers, directors, employees, representatives, predecessors, successors, and assigns (collectively, the "Releasing Parties"), hereby fully and forever unconditionally release and discharge us and our current and former parents, subsidiaries, and affiliates, and our and each of such foregoing entity's respective current and former owners, officers, directors, employees, managers, agents, representatives, predecessors, successors, and assigns (collectively, the "Sonesta RL Parties") of and from any and all claims, demands, causes of action, suits, duties, obligations, actions, liabilities, defenses or damages of every kind and nature whatsoever (collectively, "Claims") whether at law or in equity, and known or unknown, that any of the Releasing Parties now has, ever had, or, but for this document, hereafter would or could have against any of the Sonesta RL Parties, including, without limitation, Claims arising out of or relating to any relati
Source: Item 23 — RECEIPTS (FDD pages 80–246)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, Sonesta Simply Suites requires franchisees to sign a release and covenant not to sue under certain conditions. Specifically, if a franchisee asks Sonesta RL Hotels Franchising Inc. to take some action or agree to a request, Sonesta may require a general release from the franchisee (and their owners) as a condition of agreeing to the franchisee's request. As part of this, the franchisee agrees not to sue Sonesta RL Parties on any of the claims released by the agreement.
If the franchisee or any of the releasing parties (which includes the franchisee's parents, affiliates, subsidiaries, agents, spouses, heirs, etc.) breaches this covenant and initiates a lawsuit against Sonesta RL Parties, they will be in violation of the release and covenant not to sue. The FDD does not explicitly state the consequences of breaching this covenant.
However, the FDD does state that in the event of a dispute, the prevailing party is entitled to reasonable attorneys' fees, costs, and expert witness fees. While this clause does not directly address the covenant not to sue, it is likely that Sonesta Simply Suites would seek to recover legal costs and other damages if a franchisee were to violate the covenant. Prospective franchisees should seek clarification from the franchisor regarding the specific ramifications of breaching the covenant not to sue, as this is not detailed in the provided FDD excerpts.