What sections of the Sonesta Simply Suites Franchise Agreement discuss termination by the franchisee?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN | SUMMARY |
|---|---|---|
| FRANCHISE AGREEMENT | reimbursing us for our purchase of insurance on your behalf; failing to obtain or maintain licenses required to operate your Hotel; we learn of any information involving you or your affiliates that we determine is likely to adversely reflect upon any gaming licenses or permits held by us or our affiliates, or our or their reputation; we reasonably determine that continued operation of your Hotel will result in imminent danger to public health or safety; you violate any law, ordinance, rule or regulation and fail to correct such violation within 72 hours after receiving notice from us or another party; or any guarantor breaches his or her guaranty or fails to provide adequate assurances to us (subject to state law). Non-curable defaults also include engaging in the same noncompliance within any consecutive 24-month period, or breach of the Franchise Agreement on 3 or more separate occasions within any consecutive 12-month period, regardless of whether the defaults are cured. If your Hotel is damaged by fire or other casualty and you elect to repair or rebuild your Hotel, we may terminate the Franchise Agreement if you fail to complete the restoration in accordance with Brand Standards and recommence operations within 180 days after the casualty event occurs. | |
| i. Franchisee's obligations on termination/non renewal | Sections 14.C through 14.H | Pay us all amounts owed within 15 days, and promptly pay all amounts owed to third parties when due; cease use of the Marks; cease identifying yourself or any business as a current or former franchisee or Hotel and cancel all fictitious or assumed name registrations relating to the Marks; deliver to us or destroy all signs, marketing materials, forms and other materials containing any Mark or relating to a Brand Hotel, including copies of Confidential Information; de-identify your Hotel; cease using and disable or transfer to us or our designee all telephone numbers, Online Presences and other contact identifiers used to operate your Hotel; pay damages, if applicable; not interfere with our or our affiliates' relationships with vendors or consultants or engage in activity that might injure the goodwill of the Marks or Brand Hotels; and honor any advance reservations made for your Hotel prior to the termination at the rates and on the terms established at the time of booking. |
| j. Assignment of | Section 12.A | No restriction on our right to assign. |
| contract by | ||
| Franchisor | ||
| k. "Transfer" by franchisee defined | Section 12.B | Any voluntary, involuntary, direct, or indirect assignment, sale, gift, or other disposition of any interest in: the Franchise Agreement (or any interest in it); you; your Hotel or substantially all of its assets; or your owners (if such owners are legal entities). An assignment, sale, gift, or other disposition includes: transfer of ownership interest, including by public offering or private placement; merger; sale of convertible security; divorce, insolvency or dissolution; transfer by will, declaration of trust, or intestate succession; or pledge of the Franchise Agreement or an ownership interest in you or your owners as security, foreclosure, or surrender or loss of the possession, control, or management of your Hotel. |
| l. Franchisor's approval of transfer by franchisee | Section 12.B | You may not make any transfers without our prior written consent, which we will give reasonable consideration. |
| m. Conditions for Franchisor | Section 12.C | You have paid all Royalties and Brand Promotion Fees, and other amounts owed and have submitted all required reports and statements; you have not violated any provision of the Franchise Agreement, your Lease, or any other agreement with us during both the 60-day period before you requested our consent to the transfer and |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 66–70)
What This Means (2025 FDD)
Based on the 2025 Sonesta Simply Suites Franchise Disclosure Document, Item 17 provides an overview of renewal, termination, transfer, and dispute resolution pertaining to the franchise agreement. However, the provided excerpts do not contain specific details about the sections within the Franchise Agreement that explicitly address the franchisee's right to terminate the agreement. The table summarizes various provisions related to termination, but these primarily focus on actions or conditions leading to termination by the franchisor, not the franchisee.
While the excerpts detail conditions for transfer, obligations upon termination or non-renewal, and dispute resolution, they lack information on the franchisee's ability to terminate the agreement under specific circumstances. The document does mention defaults that could lead to termination, such as failing to maintain required licenses or violating laws, but these are framed as potential breaches by the franchisee leading to franchisor termination, not the other way around.
Therefore, a prospective Sonesta Simply Suites franchisee should carefully review the full Franchise Agreement and directly ask the franchisor about the conditions under which they, as the franchisee, can terminate the agreement. This includes understanding any potential penalties, notice periods, or other obligations associated with such termination. Understanding these terms is crucial for making an informed decision about investing in a Sonesta Simply Suites franchise.