When does the monthly royalty fee obligation begin for a Sonesta Simply Suites franchise?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. Royalty Fee. Beginning on the earlier of (a) the Opening Date, or (b) the date you begin operating your Hotel under the Marks, you will pay to us via ACH in U.S. dollars on or before the twentieth (20th) day of each month, including the final month of the Term, a monthly royalty fee in the amount of 5% of Gross Rooms Revenue, as defined below, accruing during the preceding calendar month (the "Royalty"). You will pay us the Royalty in the manner provided below (or as the Brand Manual otherwise prescribes).
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to the 2025 Sonesta Simply Suites Franchise Disclosure Document, the monthly royalty fee obligation begins on the earlier of two dates: either the hotel's Opening Date, or the date the franchisee begins operating the hotel under the Sonesta Simply Suites Marks.
Sonesta Simply Suites requires franchisees to pay a monthly royalty fee of 5% of Gross Rooms Revenue. This royalty fee is paid via ACH in U.S. dollars on or before the twentieth (20th) day of each month, including the final month of the Term.
For a prospective Sonesta Simply Suites franchisee, this means that royalty payments will commence as soon as the hotel opens or begins operating under the Sonesta Simply Suites brand, ensuring that Sonesta Simply Suites receives its percentage of revenue from that point forward. Franchisees should be prepared to begin these payments promptly to avoid any potential breach of the franchise agreement.