How are payments applied by Sonesta Simply Suites?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- K. Application of Payments. Despite any designation you make, we may apply any of your payments to any of your past due indebtedness to us. We may set off any amounts you or your owners owe us or our affiliates against any amounts we or our affiliates owe you or your owners.
- L. Method of Payment. You hereby authorize us to debit your checking, savings, or other account automatically for the Royalty, Brand Promotion Fee, and other amounts due to us or our affiliates (the "EFT Authorization"). You agree to sign and deliver to us any documents we require for such EFT Authorization. Such EFT Authorization shall remain in full force and effect during the Term. We will debit the account you designate for these amounts on their due dates (or the subsequent business day if the due date is a national holiday or a weekend day). You agree to ensure that funds are available in your designated account to cover our withdrawals. If we permit you to pay by any other means, we may require payment of our then-current alternative payment fee. The parties acknowledge that due to technology developments and changes different payment methods may become available during the Term. We may from time to time require that you, in lieu of direct debit withdrawals, set up another form of payment for any fees and payments due under this Agreement. If so required, you will comply within a reasonable time.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites' 2025 Franchise Disclosure Document, the franchisor has specific rights regarding the application of payments. Sonesta Simply Suites can apply a franchisee's payments to any past due debts owed to them, regardless of any specific designation the franchisee might make. This means that if a franchisee has outstanding balances, Sonesta Simply Suites can use incoming payments to cover those first.
Additionally, Sonesta Simply Suites is authorized to debit the franchisee's designated bank account automatically for royalties, brand promotion fees, and other amounts owed to them or their affiliates through an EFT Authorization. This authorization remains in effect throughout the term of the agreement, and the franchisee is responsible for ensuring sufficient funds are available in the designated account to cover these withdrawals on their due dates. If a franchisee is permitted to pay by any other method, Sonesta Simply Suites may require payment of an alternative payment fee.
Furthermore, the FDD states that Sonesta Simply Suites can offset any amounts that a franchisee or their owners owe to Sonesta Simply Suites or its affiliates against any amounts that Sonesta Simply Suites or its affiliates owe to the franchisee or their owners. This provides Sonesta Simply Suites with a mechanism to settle mutual debts efficiently. The document also mentions that due to technology developments and changes different payment methods may become available during the Term and that Sonesta Simply Suites may from time to time require that you, in lieu of direct debit withdrawals, set up another form of payment for any fees and payments due under this Agreement.
These stipulations in the franchise agreement are typical to protect the franchisor's financial interests and ensure timely payments. Prospective franchisees should be aware of these conditions and maintain diligent financial management to avoid any issues related to payment application or potential fees.