What is Sonesta Simply Suites' role in connection with the transfer of a franchise?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
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- New Franchise Agreement.
Assignee shall, concurrently with the execution of this Agreement, execute our current form of franchise agreement and related agreements (to reflect that the agreement is executed in connection with a transfer of the rights under the Existing Franchise Agreement) (the "New Franchise Agreement"), and Assignee Owner[s] shall execute the Guaranty and Assumption of Obligations attached thereto.
The New Franchise Agreement will govern Assignee's ownership and operation of the Hotel from and after the Closing Date.
If the Transfer is not consummated on or prior to the Outside Date, and we terminate this Agreement and withdraw our consent to the Transfer, then Assignee acknowledges and agrees that the New Franchise Agreement becomes null and void.
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- Conditions to Consent.
Our consent to the Transfer is conditioned on all of the following terms and conditions being met on or prior to the Closing Date:
(a) All of the representations and warranties made in this Agreement by the Franchisee Parties must be true and correct as of the Closing Date, and the Franchisee Parties further represent and warrant that, upon the consummation of the Transfer: (i) the Hotel's assets and the [Real Estate / Lease] will be held solely in the name of the Assignee, [and] (ii) neither Assignor nor Assignor Owner[s] provides Assignee or Assignee Owner[s] with any financing in connection with the Transfer[, and (iii) under the Lease, Assignee will have the right to occupy the Hotel's premises during the entire term of the New Franchise Agreement];
(b) Assignee Parties deliver to us a fully executed New Franchise Agreement and Guaranty and Assumption of Obligations;
(c) Franchisee Parties must provide us with executed versions of any other documents execute
Source: Item 23 — RECEIPTS (FDD pages 80–246)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, Sonesta Simply Suites' consent is required for a franchise transfer, and this consent is conditional. As part of the transfer, the assignee (the new franchisee) must execute Sonesta Simply Suites' current franchise agreement, along with related agreements, to reflect that the agreement is connected to the transfer of rights from the existing franchise agreement. The assignee owner(s) must also execute a Guaranty and Assumption of Obligations. This new franchise agreement dictates the assignee's ownership and operation of the hotel after the transfer's closing date. If the transfer does not occur by the specified 'Outside Date,' Sonesta Simply Suites can terminate the transfer agreement, rendering the new franchise agreement null and void.
Sonesta Simply Suites' consent is contingent upon several conditions being met by the closing date. The franchisee parties must ensure that all representations and warranties made in the agreement are accurate as of the closing date. Additionally, upon the transfer's completion, the hotel's assets and real estate or lease must be solely in the assignee's name. The assignor (the original franchisee) and assignor owners cannot provide any financing to the assignee or assignee owners related to the transfer. Under the lease, the assignee must have the right to occupy the hotel premises for the entire term of the new franchise agreement.
Furthermore, the assignee parties are required to deliver a fully executed New Franchise Agreement and Guaranty and Assumption of Obligations to Sonesta Simply Suites. The franchisee parties must also provide executed versions of any other required documents. These conditions ensure that Sonesta Simply Suites maintains control over who operates a franchise under their brand and that the new franchisee meets their standards and obligations.