Is Sonesta Simply Suites obligated to maintain Brand Promotion Fees in a separate account?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
We and our affiliates will account for Brand Promotion Fees separately from our other funds, though we are not obligated to maintain them in a separate account. We and our affiliates may use Brand Promotion Fees to reimburse us or our affiliates or designees for the salaries and benefits of personnel who directly or indirectly manage and administer the brand promotion programs, associated administrative costs, travel expenses of personnel while they are on corresponding business, meeting costs, overhead relating to the brand promotion programs, and other expenses that we incur in activities related to administering or directing brand promotion programs, including conducting market research, public relations, preparing advertising, promotion, and marketing materials, and collecting and accounting for Brand Promotion Fees. Brand Promotion Fees will not be used principally to solicit new franchise sales.
The brand promotion programs are not a trust and the Brand Promotion Fees do not bear interest. We do not owe any fiduciary obligation to you for administering the brand promotion program or any other reason. Our spending of the Brand Promotion Fees in any fiscal year may be more or less than the total Brand Promotion Fees collected by us in such year, and the brand promotion programs may borrow from us or others (paying reasonable interest) to cover deficits, or invest surplus for future use. We may prepare an annual, unaudited statement of Brand Promotion Fee payments and expenses, and give you a copy of the most recently prepared statement upon your written request to us. We may (but are not obligated to) have the accounts related to Brand Promotion Fees audited annually, which audit may be paid for using Brand Promotion Fees, by an independent certified public accountant. We may incorporate a brand promotion fund whenever we deem appropriate.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 48–60)
What This Means (2025 FDD)
According to Sonesta Simply Suites' 2025 Franchise Disclosure Document, while Sonesta Simply Suites will account for Brand Promotion Fees separately from its other funds, it is not obligated to maintain these fees in a separate account. These fees can be used to cover various expenses, including salaries and benefits of personnel managing brand promotion programs, administrative costs, travel expenses, meeting costs, and overhead related to these programs.
Sonesta Simply Suites can also use the Brand Promotion Fees for market research, public relations, advertising, and marketing materials. The document specifies that these fees will not be used primarily to solicit new franchise sales. The brand promotion programs are not considered a trust, and the Brand Promotion Fees do not accrue interest. Sonesta Simply Suites does not owe any fiduciary obligation to franchisees for administering the brand promotion program.
Sonesta Simply Suites' spending of Brand Promotion Fees in any fiscal year may be more or less than the total fees collected. The brand promotion programs may borrow funds or invest surplus for future use. While Sonesta Simply Suites may prepare an annual, unaudited statement of Brand Promotion Fee payments and expenses, and provide a copy upon written request, they are not obligated to have these accounts audited annually by an independent certified public accountant. The cost of an audit, if conducted, may be paid using Brand Promotion Fees. Sonesta Simply Suites retains the right to incorporate a brand promotion fund whenever deemed appropriate.