If Sonesta Simply Suites diverts reservations during a suspension, is the franchisee entitled to compensation?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
We will have the right to divert reservations previously made for your Hotel to other Network Hotels after giving you notice of an Event of Default.
If you fully cure the Event of Default within the time provided in our notice, including payment of any amounts accruing to us under this Agreement after the date of our notice, and further including payment of our then applicable administrative fee for resumption of services, we will restore you to the Central Reservation System, and add you to all future directories we publish and to all advertising we subsequently disseminate (except advertising that was ordered before your reinstatement), but we will not be required to redirect to you any reservations previously made for your Hotel and diverted to other Network Hotels during the period of suspension or removal, and you will be entitled to no compensation in connection with our election to suspend or remove your Hotel from our directories, advertising or the Central Reservation System.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, if a franchisee's hotel is suspended from the Central Reservation System due to an event of default, Sonesta Simply Suites has the right to divert reservations to other network hotels.
The FDD states that even if the franchisee cures the default and is reinstated into the Central Reservation System, Sonesta Simply Suites is not required to redirect previously diverted reservations back to the franchisee's hotel.
Importantly, the FDD explicitly states that the franchisee is not entitled to any compensation related to the diversion of reservations during the period of suspension or removal from the directories, advertising, or the Central Reservation System. This means that a Sonesta Simply Suites franchisee bears the risk of lost revenue from diverted reservations during any period of suspension, even if the default is eventually cured.