If Sonesta Simply Suites terminates the agreement, does that relieve the franchisee of their obligations?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) Payment of Amounts Owed.
You agree to pay us within 15 days after this Agreement expires or is terminated, or on any later date that we determine the amounts due to us, the Royalty, the Brand Promotion Fees, interest, and all other amounts owed to us (and our affiliates) which then are unpaid.
You further agree to promptly pay when due all amounts owed to third parties in connection with the operation of your Brand Hotel.
- (2) Cessation of Operations; De-Identification.
When this Agreement expires or is terminated for any reason:
a. you must cease all use, direct or indirect, of any Mark, any colorable imitation of a Mark, or other indicia of a Brand Hotel in any manner or for any purpose; and must not use for any purpose any trade name, trade or service mark, or other commercial symbol that indicates or suggests a connection or association with us;
b. you may not directly or indirectly at any time or in any manner identify yourself or any business as a current or former franchisee or Brand Hotel (except with other Network Hotels you own and operate) and you agree to take the action required to cancel all fictitious or assumed name or equivalent registrations relating to your use of any Mark;
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites' 2025 Franchise Disclosure Document, termination or expiration of the Franchise Agreement does not automatically relieve the franchisee of their obligations. Specifically, the franchisee is obligated to pay all outstanding amounts owed to Sonesta Simply Suites, including royalties, brand promotion fees, and interest, within 15 days of termination or expiration, or on any later date that Sonesta Simply Suites determines the amounts due. Franchisees must also promptly pay all amounts owed to third parties related to the operation of their Brand Hotel.
Furthermore, upon termination or expiration, franchisees must cease all use of Sonesta Simply Suites' marks and any similar imitations. They are prohibited from identifying themselves as a current or former franchisee, except in association with other Network Hotels they own and operate. Franchisees must also take action to cancel any registrations related to their use of Sonesta Simply Suites' marks.
These obligations highlight that even after the franchise agreement ends, franchisees have continuing financial and operational responsibilities. Prospective franchisees should carefully consider these post-termination obligations and ensure they are prepared to meet them, as failure to do so could result in further legal or financial repercussions.