What kind of taxes is a Sonesta Simply Suites franchisee responsible for paying?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS (Note 1) |
|---|---|---|---|
| Taxes | Varies | Upon demand | If any sales, use, gross receipts, or similar tax is imposed on us for the receipt of any payments you are required to make to us under the Franchise Agreement, then you also must pay this tax to us. |
Source: Item 6 — OTHER FEES (FDD pages 25–36)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, franchisees are responsible for paying certain taxes to the franchisor. Specifically, if any sales, use, gross receipts, or similar tax is imposed on Sonesta Simply Suites for the receipt of any payments that the franchisee is required to make under the Franchise Agreement, the franchisee must pay that tax to Sonesta Simply Suites. The amount of these taxes will vary. These taxes are due upon demand from Sonesta Simply Suites.
This means that in addition to the standard franchise fees like royalties and marketing contributions, a Sonesta Simply Suites franchisee may also be responsible for covering the franchisor's tax obligations related to those fees. This is a fairly standard practice in franchising, as franchisors typically pass on any taxes levied on their income to the franchisees who generate that income.
Prospective franchisees should be aware of this potential tax liability and factor it into their financial projections. It is important to understand what specific taxes might apply in their location and how they will be calculated. Franchisees should consult with a financial advisor to fully understand the tax implications of owning a Sonesta Simply Suites franchise.
It is also important to note that the FDD excerpt does not specify the exact types or rates of taxes that may be applicable, as these can vary depending on the jurisdiction. Therefore, it is crucial for prospective franchisees to seek clarification from Sonesta Simply Suites regarding the specific taxes they will be responsible for paying.