What is the non-compliance charge that Sonesta Simply Suites may impose on a franchisee?
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 our
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, the brand may charge a non-compliance fee. This fee can be up to one percent (1%) of Gross Rooms Revenue per month. This charge applies for each month the franchisee is not in 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, not having adequate funds available for electronic transfers, or 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 charge is outlined in the agreement, the brand has the flexibility to adjust or remove it at their discretion.