Under what circumstances must a Sonesta Simply Suites franchisee reimburse Sonesta for taxes?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. Taxes. We will have no liability for any sales, use, service, occupation, excise, gross receipts, income, property, or other taxes, whether levied upon you or your Hotel, due to the business you conduct (except for our income taxes). You are responsible for paying these taxes promptly and must reimburse us for any such taxes that we must pay to any state taxing authority on account of your operation or payments that you make to us.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, the franchisee is responsible for all taxes related to their business operations. This includes sales, use, service, occupation, excise, gross receipts, income, property, or other taxes levied on the franchisee or their hotel. The only exception is Sonesta Simply Suites's own income taxes.
Specifically, a Sonesta Simply Suites franchisee must reimburse Sonesta Simply Suites for any taxes that Sonesta Simply Suites is required to pay to a state taxing authority. This reimbursement is required if the taxes are a direct result of the franchisee's operations or payments made by the franchisee to Sonesta Simply Suites.
This means that if the taxing authority holds Sonesta Simply Suites liable for the franchisee's tax obligations, the franchisee is legally bound to cover those costs. This condition is a standard practice in franchising, ensuring that the franchisor does not bear the tax burden of its franchisees' individual businesses. Franchisees should ensure they understand their tax obligations and maintain accurate records to avoid any discrepancies that could lead to reimbursement claims from Sonesta Simply Suites.