For Sonesta Simply Suites, what is the purpose of incurring expenses related to default remedies?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS (Note 1) |
|---|---|---|---|
| Default Remedies | You shall reimburse us for all our costs and expenses we incur to remedy your default. | Case by case basis as incurred | Our expenses may include attorneys' fees (including fees for in-house attorneys), court costs and non-legal fees reasonably incurred to protect us, our subsidiaries, or affiliates or to remedy your default. |
Source: Item 6 — OTHER FEES (FDD pages 25–36)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, the "Default Remedies" fee is in place to cover all costs and expenses that Sonesta Simply Suites incurs to address a franchisee's default. These expenses can include attorneys' fees, even those for in-house attorneys, court costs, and other non-legal fees that are reasonably necessary to protect Sonesta Simply Suites, its subsidiaries, or affiliates, or to correct the franchisee's default. The franchisee is responsible for reimbursing Sonesta Simply Suites for these costs. This fee is assessed on a case-by-case basis as the costs are incurred.
This means that if a Sonesta Simply Suites franchisee fails to meet their obligations under the Franchise Agreement, they will be responsible for covering the expenses Sonesta Simply Suites incurs to rectify the situation. This could include legal action, audits, or other measures necessary to bring the franchisee back into compliance or to protect the brand's interests. The fees are not a fixed amount but depend on the specific actions Sonesta Simply Suites must take to remedy the default.
For a prospective Sonesta Simply Suites franchisee, this highlights the importance of adhering to the terms of the Franchise Agreement to avoid potential default and the associated costs. It also underscores the need to have sufficient capital to cover not only the initial investment and ongoing operational expenses but also any unforeseen costs related to rectifying a default situation. Understanding the specific triggers for default and the potential remedies available to Sonesta Simply Suites is crucial for managing risk and ensuring a successful franchise operation.