What rights does Sonesta have to purchase or merge with other businesses that compete with Sonesta Simply Suites?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
rand Manual, as hereinafter defined.
- B. No Exclusivity and Reservation of Rights. We do not grant any, and you have no, exclusive rights or territorial protection around your Hotel. We (and our affiliates) retain the right at all times during and after the Term to engage in any and all activities that we (and they) deem appropriate and that have not been expressly granted to you in this Agreement, wherever and whenever we (and they) desire, and whether or not such activities compete with your Hotel, including the right, anywhere in the world, to do any of the following:
- (1) establish and operate, and allow others to establish and operate Brand Hotels at any location on such terms and conditions we deem appropriate;
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites' 2025 Franchise Disclosure Document, Sonesta (and its affiliates) retains the right at all times during and after the term of the agreement to engage in any and all activities that they deem appropriate, including activities that compete with a franchisee's hotel.
Specifically, Sonesta Simply Suites has the right to purchase, merge, acquire, be acquired, or affiliate with one or more existing franchise networks, chains, or any other businesses, including Competitive Businesses. This right extends regardless of the location of such chains' or businesses' facilities. Following such a purchase, merger, acquisition, or affiliation, Sonesta can operate, franchise, or license those businesses under the Sonesta Simply Suites marks or any other marks, irrespective of the location of those businesses or their franchisees or licensees.
This clause indicates that a Sonesta Simply Suites franchisee has no territorial protection and faces the risk of direct competition from Sonesta or its affiliates, even through businesses acquired after the franchise agreement is signed. This is a common practice in franchising, where franchisors seek to expand their brand presence, but it underscores the importance of a franchisee's due diligence in assessing market conditions and competitive threats.