For Sonesta Simply Suites, what is management responsible for designing, implementing, and maintaining regarding internal control?

According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, management is responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. This responsibility is in accordance with accounting principles generally accepted in the United States of America.

This statement highlights the importance of internal controls in ensuring the accuracy and reliability of Sonesta Simply Suites's financial reporting. These controls are designed to prevent material misstatements, which could arise from either fraudulent activities or unintentional errors. By maintaining effective internal controls, management aims to provide stakeholders with confidence in the integrity of the financial information presented.

For a prospective Sonesta Simply Suites franchisee, this indicates that the brand places a strong emphasis on accurate financial reporting and accountability. While the franchisee may not be directly involved in designing the overall internal control system at the corporate level, they will be expected to adhere to these controls at their individual franchise location. This could involve implementing specific accounting procedures, conducting regular audits, and ensuring compliance with reporting requirements.

It is important to note that while the external auditors obtain an understanding of internal control relevant to the audit, they do not express an opinion on the effectiveness of the company's internal control. The auditor's responsibility is to design audit procedures that are appropriate in the circumstances to identify and assess the risks of material misstatement of the financial statements.