Is a transfer of interest in the Sonesta Simply Suites franchise due to death considered a transfer?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Our approval of a transfer of ownership interests in you as a result of the death or incapacity of the proposed transferor will not be unreasonably withheld or delayed so long as you notify us within three months of the death or incapacity giving rise to such transfer of the intended transferee of the ownership interests, and the Principal designated on Exhibit A continues to be the designated Principal or another individual trained in the operation of a Brand Hotel and with the requisite management experience whom we approve operates your Hotel during the interim period prior to completion of the transfer. If, as a result of the death or incapacity of the transferor, a transfer is proposed to be made to the transferor's spouse, and if we do not approve the transfer, the trustee or administrator of the transferor's estate will have nine months after our refusal to consent to the transfer to the transferor's spouse within which to transfer the transferor's interests to another party whom we approve in accordance with this Section 12.C.
D. Other Transfers By You.
(1) Transfer to a Wholly Owned Corporation or Limited Liability Company. Notwithstanding Section 12.C above, if you are in full compliance with this Agreement, you may transfer this Agreement to a corporation or limited liability company which conducts no business other than your Hotel and, if applicable, other Network Hotels in which you maintain management control, and of which you own and control one hundred percent (100%) of the economic interests, equity and voting power of all issued and outstanding ownership interests, provided that all of the
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to the 2025 Sonesta Simply Suites Franchise Disclosure Document, a transfer of ownership interests as a result of death or incapacity is considered a transfer. The document states that Sonesta Simply Suites' approval of a transfer of ownership interests due to death or incapacity will not be unreasonably withheld or delayed, provided that the franchisor is notified within three months of the event. Additionally, the designated Principal must continue to be the designated Principal or another approved individual with the necessary training and management experience to operate the hotel during the interim period before the transfer is complete.
If the transfer is proposed to the transferor's spouse and Sonesta Simply Suites does not approve the transfer, the trustee or administrator of the transferor's estate has nine months after the refusal to transfer the interests to another party approved by Sonesta Simply Suites. This ensures that the franchise continues to operate under an approved owner, maintaining the brand's standards and reputation.
Furthermore, the franchise agreement outlines that 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 owners. This broad definition encompasses transfers due to death, ensuring that such events are handled according to the franchise agreement's terms and conditions. This process helps Sonesta Simply Suites maintain control over who operates its franchises and ensures that all franchisees meet the brand's standards.