What is the minimum non-refundable initial fee required when executing the Sonesta Simply Suites Agreement?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Marks by the Opening Date, you will pay to us, as damages for failure to open on time and not as a penalty, our then-current Opening Date rescheduling fee (currently up to $5,000).
3. FEES.
A. Initial Fee. You must pay us at the time of your execution of this Agreement a non-refundable initial fee in the amount of $50,000 or $400 per Guest Room (defined below), whichever is greater (the "Initial Fee"). The Initial Fee must be paid to us by cashier's check, bank certified check, wire transfer. ACH. or credit card.
"Guest Room" means each rentable unit in your Hotel generally used for overnight guest accommodations, the entrance to which is controlled by the same key. Adjacent Gues
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites' 2025 Franchise Disclosure Document, a franchisee must pay a non-refundable initial fee when executing the franchise agreement. The initial fee is the greater of $50,000 or $400 per guest room. This fee is payable via cashier's check, bank certified check, wire transfer, ACH, or credit card.
For a prospective Sonesta Simply Suites franchisee, this means that the upfront investment will depend on the number of guest rooms the hotel has. For example, if a hotel has 100 guest rooms, the initial fee would be $40,000 (100 rooms x $400/room). However, since the minimum fee is $50,000, the franchisee would need to pay $50,000. If the hotel has 200 guest rooms, the initial fee would be $80,000 (200 rooms x $400/room).
It's important to note that this initial fee is non-refundable, regardless of whether the franchise agreement is terminated or the hotel does not open. This fee compensates Sonesta Simply Suites for the administrative and other costs it incurs in granting the franchise. The number of approved guest rooms is identified in Exhibit A of the Franchise Agreement.