Under what conditions can the Brand Promotion Fee be increased for a Sonesta Simply Suites franchise?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
<sup>4 These fees are subject to, no more than once per year, the Fee Adjustment. "Fee Adjustment" means an increase at our discretion by up to the greater of (i) 5% annually (or 10% for TMC and Consortia Fees and Operations Insights fees), on a compounding basis regardless of whether we exercise such adjustment in any calendar year, or (ii) the difference, expressed as a percentage, in CPI as determined by comparing the CPI in effect as of the Effective Date to the CPI in effect as of the Fee Adjustment, without reference to any prior Fee Adjustment, if any. "CPI" means the National Consumer Price Index-All Urban Consumers-All Items (1982-1984 = 100) published by the U.S. Department of Labor (or if the CPI is no longer published, another substitute reference reasonably designated by us).
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, certain fees, including the Brand Promotion Fee, are subject to a Fee Adjustment. The Fee Adjustment can occur no more than once per year, at Sonesta Simply Suites's discretion. The increase can be up to the greater of two options: either (i) 5% annually (or 10% for TMC and Consortia Fees and Operations Insights fees), on a compounding basis regardless of whether Sonesta Simply Suites exercises such adjustment in any calendar year, or (ii) the difference, expressed as a percentage, in the CPI (Consumer Price Index).
The CPI is determined by comparing the CPI in effect as of the Effective Date to the CPI in effect as of the Fee Adjustment, without reference to any prior Fee Adjustment. CPI is defined as the National Consumer Price Index-All Urban Consumers-All Items (1982-1984 = 100) published by the U.S. Department of Labor. If the CPI is no longer published, Sonesta Simply Suites can designate another substitute reference.
This means that Sonesta Simply Suites franchisees could see their Brand Promotion Fees increase annually, based on either a fixed percentage or the change in the Consumer Price Index, whichever is greater. This adjustment allows Sonesta Simply Suites to account for inflation and other economic factors that may impact the costs of providing services and support to franchisees. Franchisees should be aware of this potential for fee increases and factor it into their financial planning.