If Sonesta Simply Suites terminates the agreement immediately, is there a cure period?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
B. Immediate Termination by Us. We have the right to terminate this Agreement immediately upon notice to you (or terminate it at the earliest time permitted by applicable law) if one or more of the following breaches to this Agreement or any of its attachments occur:
(1) After curing any Event of Default of this Agreement or the Brand Standards you engage in the same noncompliance within any consecutive 24 month period, or you fail on three or more separate occasions within any 12 consecutive month period to comply with this Agreement, whether or not the noncompliance is corrected after notice; or after we have notified you of your noncompliance with any of the requirements imposed by this Agreement or the Brand Standards, regardless of materiality, you engage in a pattern of noncompliance with any of those requirements, whether or not the noncompliance is corrected after notice, which pattern of non-compliance in and of itself will be deemed material:
(2) You or any guarantor of your obligations under this Agreement:
a.
Fail to pay us (or our affiliates) any amounts due and do not correct the failure within ten days after we deliver written notice of that failure to you;
- b.
Generally fails to pay your or its debts as they become due, including to the lessor of Premises (if leased) and any other amounts owed in connection with your Hotel; admits in writing your or its insolvency or inability to pay its debts or obligations as they become due; your or its liabilities exceed its assets; or makes a general assignment for the benefit of your or its creditors;
- c.
Commence any case, proceeding or other action seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of you or it or your or its debts under any law relating to bankruptcy, insolvency, reorganization, or relief of debtors, or seeking appointment of a receiver, trustee, custodian or other similar official for you or it or for all or any substantial part of your or its property;
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, the franchisor has the right to terminate the agreement immediately upon notice to the franchisee (or at the earliest time permitted by applicable law) if certain breaches occur. These breaches include repeated noncompliance with the agreement or brand standards within specified timeframes, failure to pay amounts due to the franchisor or affiliates after a ten-day notice period, or instances of insolvency or assignment for the benefit of creditors.
Specifically, Sonesta Simply Suites can immediately terminate the agreement if, after curing an event of default, the franchisee engages in the same noncompliance within a 24-month period, or fails to comply with the agreement on three or more separate occasions within a 12-month period, regardless of whether the noncompliance is corrected after notice. A pattern of non-compliance with the requirements imposed by the agreement or the Brand Standards, regardless of materiality, also allows for immediate termination, even if the non-compliance is corrected after notice.
Furthermore, immediate termination is permitted if the franchisee or any guarantor fails to pay amounts due to Sonesta Simply Suites or its affiliates and does not correct the failure within ten days after written notice. Immediate termination can also occur if the franchisee generally fails to pay debts as they become due, admits insolvency, has liabilities exceeding assets, or makes a general assignment for the benefit of creditors. The commencement of any case seeking reorganization, liquidation, or appointment of a receiver also constitutes grounds for immediate termination by Sonesta Simply Suites.
These conditions for immediate termination mean that a Sonesta Simply Suites franchisee needs to maintain strict compliance with the franchise agreement and brand standards to avoid the risk of immediate termination without an opportunity to cure the default in certain situations. Prospective franchisees should be aware of these conditions and ensure they have the resources and capabilities to meet these obligations.