Can Sonesta Simply Suites transfer or assign the Franchise Agreement?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
12. TRANSFER.
- A. By Us. We have the right to transfer or assign this Agreement or any of our rights, obligations, or assets under this Agreement to any person or legal entity so long as the transferee assumes all our obligations to you under this Agreement.
- B. By You. You acknowledge and agree that the rights and duties this Agreement creates are personal to you (or to your owners if you are an Entity) and that we have granted you the Franchise in reliance upon our perceptions of your (or your owners') individual or collective character, skill, aptitude, attitude, business ability, and financial capacity. Accordingly, neither this Agreement (or any interest in this Agreement), your Hotel or substantially all its assets, any direct or indirect ownership interest in you (regardless of its size), nor any ownership interest in any of your owners (if such owners are legal entities) may be transferred without our prior written approval, which consent will not be unreasonably withheld or delayed. You further agree that you will not enter into any proposed mortgage, pledge, hypothecation, encumbrance or giving of a security interest in or which affects your Hotel, this Agreement, or your rights under this Agreement without our prior written consent. A transfer of your Hotel ownership, possession, or control, or substantially all its assets, may be made only with a transfer of this Agreement. Any transfer, or attempt to transfer, without our approval is a breach of this Agreement and has no effect. In this Agreement, the term "transfer" includes a voluntary, involuntary, direct, or indirect assignment, sale, gift, or other disposition of any interest in:
- (1) this Agreement;
- (2) you;
- (3) your Hotel or substantially all its assets; or
- (4) your owners (if such owners are legal entities).
An assignment, sale, gift, or other disposition includes the following events:
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, Sonesta RL Hotels Franchising Inc. (the franchisor) has the right to transfer or assign the Franchise Agreement or any of its rights, obligations, or assets under the agreement. This is permissible as long as the transferee assumes all of Sonesta Simply Suites's obligations to the franchisee under the agreement.
However, the franchisee's ability to transfer the agreement is restricted. The document states that the rights and duties created by the Franchise Agreement are personal to the franchisee. Sonesta Simply Suites grants the franchise in reliance on their perception of the franchisee's character, skill, aptitude, attitude, business ability, and financial capacity. Therefore, the franchisee cannot transfer the agreement (or any interest in it), the hotel, or any direct or indirect ownership interest without prior written approval from Sonesta Simply Suites. This consent will not be unreasonably withheld or delayed.
The term "transfer" includes any voluntary, involuntary, direct, or indirect assignment, sale, gift, or other disposition of any interest in the agreement, the franchisee, the hotel, or the franchisee's owners (if the owners are legal entities). Additionally, the franchisee cannot enter into any proposed mortgage, pledge, encumbrance, or security interest affecting the hotel, the agreement, or the franchisee's rights without prior written consent from Sonesta Simply Suites. Any transfer or attempted transfer without approval constitutes a breach of the agreement and has no effect.