Under what circumstances can Sonesta Simply Suites immediately terminate the agreement?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
we may have in this Agreement, including our right to terminate this Agreement. If we exercise any of these rights, the exercise will not be a waiver of any breach by you of any term, covenant, or condition of this Agreement.
- B. Immediate Termination by Us. We have the right to terminate this Agreement immediately upon notice to you (or terminate it at the earliest time permitted by applicable law) if one or more of the following breaches to this Agreement or any of its attachments occur:
- (1) After curing any Event of Default of this Agreement or the Brand Standards you engage in the same noncompliance within any consecutive 24 month period, or you fail on three or more separate occasions within any 12 consecutive month period to comply with this Agreement, whether or not the noncompliance is corrected after notice; or after we have notified you of your noncompliance with any of the requirements imposed by this Agreement or the Brand Standards, regardless of materiality, you engage in a pattern of noncompliance with any of those requirements, whether or not the noncompliance is corrected after notice, which pattern of non-compliance in and of itself will be deemed material:
- (2) You or any guarantor of your obligations under this Agreement:
- a. Fail to pay us (or our affiliates) any amounts due and do not correct the failure within ten days after we deliver written notice of that failure to you;
- b. Generally fails to pay your or its debts as they become due, including to the lessor of Premises (if leased) and any other amounts owed in connection with your Hotel; admits in writing your or its insolvency or inability to pay its debts or obligations as they become due; your or its liabilities exceed its assets; or makes a general assignment for the benefit of your or its creditors;
- c.
- (1) After curing any Event of Default of this Agreement or the Brand Standards you engage in the same noncompliance within any consecutive 24 month period, or you fail on three or more separate occasions within any 12 consecutive month period to comply with this Agreement, whether or not the noncompliance is corrected after notice; or after we have notified you of your noncompliance with any of the requirements imposed by this Agreement or the Brand Standards, regardless of materiality, you engage in a pattern of noncompliance with any of those requirements, whether or not the noncompliance is corrected after notice, which pattern of non-compliance in and of itself will be deemed material:
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to the 2025 Sonesta Simply Suites Franchise Disclosure Document, Sonesta Simply Suites has the right to terminate the franchise agreement immediately upon notice if certain breaches occur. These breaches include repeated noncompliance with the agreement or brand standards, even if corrected, within specified timeframes. Specifically, if a franchisee engages in the same noncompliance after curing an initial event of default within a 24-month period, or fails to comply with the agreement on three or more separate occasions within a 12-month period, Sonesta Simply Suites can terminate the agreement. A pattern of non-compliance with any requirements, whether corrected or not, is also grounds for immediate termination.
Immediate termination can also occur if the franchisee or any guarantor fails to pay amounts due to Sonesta Simply Suites or its affiliates and does not correct the failure within ten days after written notice. Further, if the franchisee generally fails to pay debts as they become due, admits insolvency, has liabilities exceeding assets, or makes a general assignment for the benefit of creditors, Sonesta Simply Suites can immediately terminate the agreement. The commencement of any case seeking reorganization, liquidation, or appointment of a receiver for the franchisee or its property also constitutes grounds for immediate termination.
These termination rights are significant for a prospective Sonesta Simply Suites franchisee. The franchisee must maintain strict compliance with all aspects of the franchise agreement and brand standards to avoid immediate termination. The financial stability of the franchisee is also critical, as any indication of insolvency or failure to pay debts can lead to immediate termination. The franchisee should be aware of these conditions and ensure they have the resources and management capabilities to meet all obligations under the franchise agreement.