How is the non-compliance charge calculated for Sonesta Simply Suites franchisees?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
If we determine in good faith that the effect of any law enacted hereafter will be materially detrimental to our interests, we may terminate this Agreement by delivering written notice thereof to you.
- N. Non-Compliance Charge. In addition to our other rights and remedies, we may charge you a non-compliance charge in an amount equal to one percent (1%) of Gross Rooms Revenue per month for each month you are in non-compliance of any term of this Agreement, including failure to pay (or to have adequate amounts available for electronic transfer of) amounts you or your Affiliates owe us or ou
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, Sonesta Simply Suites may charge franchisees a non-compliance fee. This charge is calculated as one percent (1%) of the Gross Rooms Revenue per month. This fee applies for each month the franchisee is in non-compliance with any term of the Franchise Agreement.
Examples of non-compliance that could trigger this charge include failing to pay amounts owed to Sonesta Simply Suites or its affiliates, or not having sufficient funds available for electronic transfers. It also applies to failing to provide required reports and financial statements on time.
However, Sonesta Simply Suites retains the discretion to change or eliminate this non-compliance charge. This means that while the 1% charge is the standard, it could be adjusted or removed entirely at the discretion of the franchisor.
This clause highlights the importance of adhering to the Franchise Agreement. Franchisees should ensure they meet all payment obligations, reporting deadlines, and other requirements to avoid incurring this additional monthly charge. Prospective franchisees should clarify with Sonesta Simply Suites the specific triggers for this charge and any recent history of its application to existing franchisees.