Does the transfer section of the Sonesta Simply Suites agreement apply to the franchisee's owners?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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)
Yes, according to the 2025 Sonesta Simply Suites Franchise Disclosure Document, the transfer restrictions apply to the franchisee's owners. Sonesta Simply Suites requires that the rights and duties created by the franchise agreement are personal to the franchisee, or to the franchisee's owners if the franchisee is a legal entity. Sonesta Simply Suites grants the franchise in reliance upon their perceptions of the owners' individual or collective character, skill, aptitude, attitude, business ability, and financial capacity.
Therefore, any direct or indirect ownership interest in the franchisee, regardless of its size, or any ownership interest in any of the franchisee's owners (if such owners are legal entities) cannot be transferred without Sonesta Simply Suites' prior written approval. This consent will not be unreasonably withheld or delayed.
The term "transfer" includes a voluntary, involuntary, direct, or indirect assignment, sale, gift, or other disposition of any interest in the franchise agreement, the franchisee, the hotel or substantially all of its assets, or the franchisee's owners (if such owners are legal entities).