If a Sonesta Simply Suites franchisee (or their Principal) does not personally manage their Hotel, what are they required to do?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
You are not required to participate personally in the direct operation of your Hotel, although we recommend that you do so. If you (or your Principal, if you are a legal entity) do not personally manage your Hotel, you must hire a management company (the "Management Company") that we approve to manage the direct operation of your Hotel. The management agreement or other agreement between you and the Management Company will be subject to our prior written approval. Prior to opening your Hotel or within 90 days of activating your Hotel in our system, one of your Hotel Representative(s) must complete our training program to our satisfaction. Whether you are an individual, corporation, limited liability company, partnership or other entity, you are at all times responsible for the management, direction and control of your Hotel, regardless of whether you retain a Management Company. If you are a legal entity, your "Principal" must have at least a 25% ownership interest and voting power in you and must have the authority of a chief executive officer. If you hire a Management Company, it will not be required to have an equity interest in you.
If you hire a Management Company, we require the Management Company to execute the Management Company Joinder to the Franchise Agreement, whereby the Management Company agrees that it is bound by all of the terms of the Franchise Agreement and agrees that it is jointly and severally liable with you for all your obligations under the Franchise Agreement, except with respect to the actual payments of any amounts due to any third parties, our affiliates or pursuant to the Franchise Agreement. The Management Company must have the authority to act on your behalf and deal with us in all matters that may arise under the Franchise Agreement, and we will be entitled to rely solely upon a decision of the Management Company. In the case of any conflict between the Franchise Agreement and any management agreement between you and the Management Company, the Franchise Agreement will prevail.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 65–66)
What This Means (2025 FDD)
According to Sonesta Simply Suites' 2025 Franchise Disclosure Document, while personal involvement in the hotel's direct operation is recommended, it is not mandatory. If neither the franchisee nor their Principal (if the franchisee is a legal entity) directly manages the hotel, they must engage a management company approved by Sonesta Simply Suites.
The agreement between the franchisee and the management company is subject to Sonesta Simply Suites' prior written approval. Additionally, within 90 days of the hotel's activation in the Sonesta Simply Suites system or before opening, one of the franchisee's Hotel Representatives must satisfactorily complete the brand's training program. Regardless of whether a management company is hired, the franchisee retains ultimate responsibility for the hotel's management, direction, and control.
If a management company is hired, Sonesta Simply Suites requires the management company to execute a Management Company Joinder to the Franchise Agreement. This joinder makes the management company jointly and severally liable with the franchisee for all obligations under the Franchise Agreement, except for the actual payments of amounts due to third parties, Sonesta Simply Suites' affiliates, or pursuant to the Franchise Agreement. The management company must have the authority to act on the franchisee's behalf in all matters arising under the Franchise Agreement, and Sonesta Simply Suites is entitled to rely solely on the decisions of the management company. In case of any conflict between the Franchise Agreement and any management agreement, the Franchise Agreement prevails.