How much are the pre-opening damages for a Sonesta Simply Suites franchise?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
uch termination. |
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS (Note 1) |
|---|---|---|---|
| Pre-Opening Damages | $3,600 per Guest Room | Upon demand | You must pay us these damages if we terminate the Franchise Agreement for your breac |
Source: Item 6 — OTHER FEES (FDD pages 25–36)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, pre-opening damages are $3,600 per guest room. This fee is levied if Sonesta Simply Suites terminates the Franchise Agreement due to the franchisee's breach before the hotel's authorized opening. The payment is due upon demand by Sonesta Simply Suites.
This means that if a franchisee fails to meet their obligations under the Franchise Agreement during the pre-opening phase, leading to termination by Sonesta Simply Suites, the franchisee will be required to pay $3,600 for each guest room planned for the hotel. For example, a 100-room hotel would incur $360,000 in pre-opening damages.
This fee serves as a form of liquidated damages to compensate Sonesta Simply Suites for the costs and losses incurred due to the franchisee's failure to open the hotel as agreed. Prospective franchisees should carefully review the terms of the Franchise Agreement to understand what constitutes a breach that could lead to termination and the imposition of these damages. It is important to have sufficient capital and a solid business plan to minimize the risk of pre-opening termination and associated costs.