Does Sonesta Simply Suites specify that the brand promotion programs are a trust?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
We and our affiliates will account for Brand Promotion Fees separately from our other funds, though we are not obligated to maintain them in a separate account.
The brand promotion programs are not a trust and the Brand Promotion Fees do not bear interest. We do not owe any fiduciary obligation to you for administering the brand promotion program or any other reason. We or our affiliates will use Brand Promotion Fees for the purposes described in this Section 9.A. Our spending of the Brand Promotion Fees in any fiscal year may be more or less than the total Brand Promotion Fee payments in that year, and the brand promotion programs may borrow from us or others (paying reasonable interest) to cover deficits, or invest any surplus for future use. We may prepare an annual, unaudited statement of Brand Promotion Fee payments and expenses, and give you a copy of the most recently prepared statement upon your written request to us. We may (but are not obligated to) have our accounts related to Brand Promotion Fees audited annually, which audit may be paid for using Brand
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, the brand promotion programs are explicitly stated not to be a trust. The document clarifies that Sonesta Simply Suites and its affiliates will manage Brand Promotion Fees separately from their other funds, although they are not required to keep them in a separate account.
Furthermore, the FDD states that the Brand Promotion Fees do not bear interest, and Sonesta Simply Suites does not owe any fiduciary obligation to franchisees for administering the brand promotion program. This means that franchisees should not expect these fees to be managed as a trust where the franchisor has a legal duty to act in the franchisee's best interest.
Sonesta Simply Suites has the discretion to use these fees for purposes described in Section 9.A of the agreement, and spending in any fiscal year may be more or less than the total fees collected that year. The brand promotion programs can also borrow funds or invest any surplus for future use. While an annual, unaudited statement of Brand Promotion Fee payments and expenses may be prepared and provided upon written request, there is no obligation for Sonesta Simply Suites to have these accounts audited annually.