Is a transfer fee required for a Sonesta Simply Suites franchise transfer?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
th us during both the 60-day period before you requested our consent to the transfer and |
| PROVISION | SECTION IN | SUMMARY |
|---|---|---|
| FRANCHISE AGREEMENT | ||
| approval of transfer | the period between your request and the effective date of the transfer, nor have you received a notice of termination from us; the transferee, its owners and its affiliates do not have an ownership interest in or perform services for a Competitive Business; you provide us all information or documents we request about the proposed transfer, the transferee, and its owners; the transferee satisfactorily completes any training, brand introduction and/or orientation program that we require at the time of the transfer; your landlord, if applicable, consents to the transfer or sublease of the Lease; the transferee agrees to meet with us at our request, either virtually or in person, to conduct an inspection of the Premises and develop a PIP for necessary upgrades, remodeling, and refurbishment of your Hotel and your Hotel's FF&E in accordance with our then current requirements and specifications for Brand Hotels, and complete the renovation work therein within 120 days after the effective date of the transfer; the transferee, at our request, signs our then current form of franchise agreement and related documents (which agreement may differ materially from the Franchise Agreement); transferee meets our qualifications then imposed on new franchisees; payment of transfer fee; you and your owners sign a general release; and you cease to identify yourself as a current or former franchisee. | |
| n. Franchisor's | Not Applicable | Not Applicable |
| right of first | ||
| refusal to acquire | ||
| franchisee's | ||
| business | ||
| o. Franchisor's | Not Applicable | Not Applicable |
| option to | ||
| purchase | ||
| franchisee's | ||
| business | ||
| p. Death or disability of franchisee | Section 12.C | Upon the death or incapacity of a franchisee who is a natural person or one of your owner's if you are an entity, if a transfer is proposed to be made to such person's spouse and we do not approve the spouse as transferee, the trustee or administrator of the transferor's estate will have nine months after the disapproval in which to transfer the interests to another party approved by us. Transfer to a spouse will be subject to the same conditions identified in subsection m. |
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, a transfer fee is generally required to transfer a franchise. The FDD outlines several conditions that must be met to obtain approval for a transfer.
One of the conditions for the franchisor's approval of a transfer is the 'payment of transfer fee'. This indicates that a fee is typically associated with the transfer of a Sonesta Simply Suites franchise. However, there is an exception: if a franchisee who is a natural person dies or becomes incapacitated, a transfer to their spouse is proposed, and Sonesta Simply Suites does not approve the spouse as the transferee, the trustee or administrator of the transferor's estate will have nine months to transfer the interests to another approved party, and in this specific case, no transfer fee will be due for a transfer to the spouse.
It is important to note that the transferee must also meet several other conditions, such as completing required training, agreeing to a Property Improvement Plan (PIP) for upgrades, and signing the then-current form of the franchise agreement. The franchise agreement signed by the transferee may differ materially from the original agreement. The prospective franchisee should carefully review all conditions and potential costs associated with transferring a Sonesta Simply Suites franchise.