Can Sonesta Simply Suites transfer or assign the Franchise Agreement to another party?
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).
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, the franchise agreement can be transferred or assigned by either Sonesta Simply Suites as the franchisor or the franchisee, but under different conditions. Sonesta Simply Suites has the right to transfer or assign the agreement or any of its rights, obligations, or assets to another party, provided that 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 more restricted. The document states that the rights and duties created by the agreement are personal to the franchisee, and the franchise was granted based on Sonesta Simply Suites's perception of the franchisee's character, skills, business ability, and financial capacity. Therefore, the franchisee cannot transfer the agreement, the hotel, substantially all of its assets, or any direct or indirect ownership interest without Sonesta Simply Suites's prior written approval. This approval will not be unreasonably withheld or delayed.
The term "transfer" is broadly defined to include any voluntary, involuntary, direct, or indirect assignment, sale, gift, or other disposition of any interest in the agreement, the franchisee, the hotel or its assets, or the franchisee's owners. Any transfer or attempted transfer without Sonesta Simply Suites's approval constitutes a breach of the agreement and has no effect. This ensures that Sonesta Simply Suites maintains control over who operates a franchised location and protects the brand's standards and reputation.