What is the purpose of the New Construction Rider for a Sonesta Simply Suites franchise?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Background. This Rider is annexed to and forms part of the Franchise Agreement. This Rider is being signed because you are constructing a new Brand Hotel, pursuant to the Franchise Agreement. Capitalized terms used, but not defined, herein shall have the meanings given them in the Franchise Agreement.
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- Interest in Premises. You must deliver to us, before you commence construction, and in any event no later than thirty (30) days after the Effective Date, either a deed reflecting your ownership of the Premises (the "Deed") or a copy of your lease for the Premises that allows you the right to enter into the Franchise Agreement (the "Lease"). If you fail to timely provide us the Deed or Lease, we may immediately terminate the Franchise Agreement. You represent and warrant that, throughout the Term of the Franchise Agreement, you will be entitled to possession of the Premises and your Hotel without restrictions that would interfere with your performance under the Franchise Agreement, subject to the reasonable requirements of any financing secured by your Hotel. You will provide us copies of all documentation reflecting your right to possession of the Premises at any time upon our request. Further, if you do not own the Premises, you must provide us with copies of any amendment, addendum, extension, or other modification to the Lease within five days following execution.
You acknowledge and agree that any of our involvement in the approval of location is for our sole benefit. You further acknowledge that you have been advised to obtain the advice of your own professional advisors in connection with your purchase of the Premises or the Lease, as applicable.
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- Construction Work. You agree to take all action necessary to perform the development and construction of your Hotel, renovation, furnishing, equipping, acquisition of supplies and the implementation of the Plans (as defined below) ("Construction Work") all in accordance with the terms and conditions of the Franchise Agreement, within the time frames that we specify. You will be solely responsible for obtaining all necessary licenses, permits and zoning variances required for the Construction Work. Before you begin the Construction Work, you will submit copies of applicable permits, licenses and zoning variances to us for approval. We may assign you a project manager or onboarding specialist.
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- Plans and Designs. You must submit to us your plans, layouts, specifications, and drawings for your Hotel (collectively, the "Plans"), and your plans, layouts, specifications, and drawings for the proposed furnishings, fixtures, equipment and décor of your Hotel (collectively, the "Designs") with respect to the Construction Work.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to the 2025 Sonesta Simply Suites Franchise Disclosure Document, the New Construction Rider is an addendum to the Franchise Agreement specifically for franchisees constructing a new Sonesta Simply Suites Brand Hotel. The rider outlines the obligations and requirements related to the construction phase.
One key aspect of the rider is the requirement for the franchisee to provide Sonesta Simply Suites with either a deed proving ownership of the premises or a copy of the lease within 30 days of the Franchise Agreement's effective date. Failure to do so can result in immediate termination of the Franchise Agreement. The franchisee must also ensure they have the right to possess and operate the hotel without interference throughout the term of the agreement. Additionally, any modifications to the lease must be reported to Sonesta Simply Suites within five days of execution.
The New Construction Rider also addresses construction timelines. Construction must commence within 12 months of the Franchise Agreement's effective date, although this may be extended with Sonesta Simply Suites's approval and a payment of $5,000. The hotel must be completed and open for business within 18 months of breaking ground, and no later than 30 months from the effective date. Franchisees cannot open the hotel until Sonesta Simply Suites provides written authorization, which is granted only after confirming compliance with all terms of the Franchise Agreement and brand standards. Opening without authorization constitutes a material breach of the agreement and unauthorized use of the Marks.
Overall, the New Construction Rider ensures that Sonesta Simply Suites maintains control over the construction process, protecting its brand standards and ensuring timely project completion. It sets clear expectations for franchisees regarding property ownership, construction timelines, and adherence to brand standards, with specific consequences for non-compliance.