What is the timeframe considered 'consecutive' when determining non-curable defaults for a Sonesta Simply Suites franchisee?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 66–70)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, non-curable defaults 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.
This means that Sonesta Simply Suites franchisees need to be aware that repeated instances of noncompliance or breaches of the franchise agreement within specific timeframes can lead to termination, even if the individual defaults are addressed. Specifically, if a franchisee engages in the same type of noncompliance within a 24-month period, or breaches the agreement three or more times within a 12-month period, Sonesta Simply Suites can terminate the agreement.
This policy underscores the importance of consistent adherence to the franchise agreement and brand standards. Prospective franchisees should carefully review the franchise agreement to understand what constitutes noncompliance or a breach, and implement systems to ensure ongoing compliance. The policy also highlights the need for franchisees to maintain open communication with Sonesta Simply Suites to address any potential issues proactively and avoid repeated defaults that could jeopardize their franchise.