Under what condition can Sonesta Simply Suites terminate the franchise agreement due to condemnation?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event of a Condemnation Termination, you will pay all amounts accrued prior to the effective date of the Condemnation Termination and follow the post-termination requirements set forth herein.
If such taking, in our business judgment, does not require the termination of this Agreement, then you will make all necessary modifications to make your Hotel conform to its condition, character and appearance immediately before such taking, according to Plans and Designs approved by us.
You will take all measures to ensure that the resumption of normal operations at your Hotel is not unreasonably delayed.
You will not be obligated to pay Lost Revenue Damages in the event of a Condemnation Termination.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites' 2025 Franchise Disclosure Document, the franchise agreement can be terminated due to condemnation. In the event of a Condemnation Termination, the franchisee is required to pay all amounts accrued up to the termination date and adhere to the post-termination requirements outlined in the agreement. However, the franchisee will not be obligated to pay Lost Revenue Damages in the event of a Condemnation Termination.
If, in Sonesta Simply Suites' business judgment, the taking does not necessitate termination, the franchisee must make all necessary modifications to ensure the hotel conforms to its condition, character, and appearance immediately before the taking, according to plans and designs approved by Sonesta Simply Suites. The franchisee is also responsible for taking measures to ensure that the resumption of normal operations at the hotel is not unreasonably delayed.
This clause protects the franchisee from Lost Revenue Damages in the event of a Condemnation Termination, which is a positive aspect. However, it also places the onus on the franchisee to make necessary modifications if Sonesta Simply Suites determines that the agreement should not be terminated, potentially requiring additional investment from the franchisee to maintain brand standards and operational efficiency.