What is the maximum the Brand Promotion Fee can be increased to for a Sonesta Simply Suites franchise?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS (Note 1) |
|---|---|---|---|
| Royalty | 5% of Gross Rooms Revenue | Payable monthly by the 20th day of the following month | See Note 2. |
| Brand Promotion Fee | 3.5% of Gross Rooms Revenue | Payable monthly by the 20th day of the following month | See Note 2. We may increase the Brand Promotion Fee up to 4.5%, upon notice to you. |
Source: Item 6 — OTHER FEES (FDD pages 25–36)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, the Brand Promotion Fee is initially 3.5% of Gross Rooms Revenue, payable monthly. Sonesta Simply Suites retains the right to increase this fee up to a maximum of 4.5% of Gross Rooms Revenue.
This increase is significant for franchisees as it directly impacts their operating costs and profitability. Franchisees need to factor this potential increase into their financial projections and business plans. It is important to note that the increase is at the discretion of Sonesta Simply Suites, providing them with flexibility in managing brand promotion activities.
Understanding the terms and conditions related to fee increases is crucial for prospective franchisees. While the initial fee is set at 3.5%, the potential for a 1% increase (to 4.5%) should be carefully considered. Franchisees should also be aware of how 'Gross Rooms Revenue' is defined, as this forms the basis for calculating the Brand Promotion Fee. This definition includes various revenue streams related to room rentals but excludes other charges like food and beverage or taxes.