What is the limitation on liability for direct damages for Sonesta Simply Suites?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOST PROFITS OR LOST REVENUE (COLLECTIVELY REFERRED TO AS "INDIRECT DAMAGES") ARISING FROM, RELATING TO, OR IN CONNECTION WITH THE SERVICE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF OR COULD HAVE FORESEEN SUCH DAMAGES. IN ADDITION, EACH PARTY'S DIRECT DAMAGES (AND ANY INDIRECT DAMAGES TO THE EXTENT THAT A COURT OF COMPETENT JURISDICTION OR OTHER AUTHORITY DOES NOT RECOGNIZE OR ENFORCE THE ABOVE WAIVER) SHALL BE LIMITED TO THE TOTAL FEES PAID BY YOU TO US DURING THE THEN CURRENT TERM OF THE FRANCHISE AGREEMENT.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, the liability for direct damages involving the Sonesta Simply Suites franchise is limited to the total fees paid by the franchisee to the franchisor during the current term of the franchise agreement. This limitation also applies to any indirect damages if a court does not recognize the waiver for such damages.
This means that if a franchisee incurs direct damages due to actions or inactions of Sonesta Simply Suites, the maximum amount they can recover is capped at the total franchise fees they've paid up to that point in the agreement's term. This could significantly limit the franchisee's ability to recoup losses, especially if the damages exceed the fees paid.
It is important for a prospective Sonesta Simply Suites franchisee to understand this limitation and consider its potential impact on their business. They should consult with a legal professional to fully assess the risks and implications of this clause before entering into a franchise agreement. This type of limitation on liability is not uncommon in franchise agreements, but the specific terms can vary widely, so careful review is essential.