Under what circumstances can a Sonesta Simply Suites franchisee bring a claim against Sonesta?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
e permissible.
The provisions of this Section are intended to benefit and bind certain third-party non-signatories and will continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement.
Any provisions of this Agreement below that pertain to judicial proceedings shall be subject to the agreement to arbitrate contained in this Section. Notwithstanding the foregoing, nothing in this Section shall prohibit either party from filing a claim in court for collection of amounts owed to it, in accordance with Section 17.H.
- G. Governing Law. Except to the extent governed by the Federal Arbitration Act, the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. Sections 1051 et seq.), or other United States federal law, this Agreement or any related agreements, the Franchise, and all claims arising from the relationship between us (or any of our affiliates, and our and their respective owners, officers, directors, agents, representatives, and employees) and you (and your owners, guarantors, affiliates, and employees), whether couched in tort or contract, will be governed by the laws of the Commonwealth of Massachusetts, without regard to its conflict of laws rules, except that any state law regulating the offer or sale of franchises or governing the relationship of a franchisor and its franchisee will not apply unless its jurisdictional requirements are met independently without reference to this Section. If any of the provisions of this Agreement which relate to restrictions on you and your owners' competitive activities are found unenforceable under Massachusetts law, the enforceability of those provisions will be governed by the laws of the state in which your Hotel is located.
- H. Consent to Jurisdiction. Subject to the obligation to arbitrate under Section 17.F above and the provisions below, you and your owners agree that all actions arising under this Agreement or any related agreements, or otherwise as a result of the relationship between you (and your owners, guarantors, affiliates, and employees) and us (or any of our affiliates, and our and their respective owners, officers, directors, agents, representatives, and employees) must be commenced in the court nearest to our or, as applicable, our successor's or assign's then current principal place of business (currently Newton, Massachusetts), and you (and each owner) irrevocably submit to the jurisdiction of that court and waive any objection you (or the owner) might have to either the jurisdiction of or venue in that court.
- I. Waiver of Punitive Damages, Jury Trial, and Class Action.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, a Sonesta Simply Suites franchisee can bring a claim against Sonesta RL Hotels Franchising Inc. for collection of amounts owed to it, in accordance with Section 17.H of the franchise agreement. However, any provisions of the agreement that pertain to judicial proceedings shall be subject to the agreement to arbitrate contained in that section.
Furthermore, the Guaranty of Performance outlines that Red Lion Hotels Corporation, as the Guarantor, absolutely and unconditionally guarantees the performance by Sonesta RL Hotels Franchising Inc. of all obligations in accordance with the terms and conditions of the franchise registration in each state where the franchise is registered, and under its Franchise Agreement identified in its 2025 Franchise Disclosure Document. This guarantee remains in effect until all obligations of Sonesta RL Hotels Franchising Inc. under its franchise registrations and Franchise Agreements are satisfied or until the liability of Sonesta RL Hotels Franchising Inc. to its franchisees under the Franchise Agreement has been completely discharged, whichever occurs first. The Guarantor is not discharged from liability if a claim by a franchisee against Sonesta RL Hotels Franchising Inc. remains outstanding.
Additionally, the franchisee and its owners agree that all actions arising under the Franchise Agreement or any related agreements, or otherwise as a result of the relationship between the franchisee and Sonesta RL Hotels Franchising Inc., must be commenced in the court nearest to Sonesta RL Hotels Franchising Inc.'s principal place of business (currently Newton, Massachusetts). The franchisee irrevocably submits to the jurisdiction of that court and waives any objection to the jurisdiction of or venue in that court, subject to the obligation to arbitrate.