Under what conditions is a Sonesta Simply Suites franchisee required to pay for an audit?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS (Note 1) |
|---|---|---|---|
| Audit | Cost of audit, including the charges of attorneys and independent accountants and the travel expenses, room and board, and compensation of our employees | As billed | This is payable only if we find that you have underreported Gross Rooms Revenue by 2% or more, or if the audit is caused by your failure to provide reports, records or other information. |
Source: Item 6 — OTHER FEES (FDD pages 25–36)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, a franchisee may be required to pay for an audit under specific circumstances related to financial reporting accuracy. The franchisee will bear the cost of the audit, including fees for attorneys and independent accountants, as well as travel expenses, room and board, and compensation for Sonesta Simply Suites's employees involved in the audit.
The primary condition that triggers the audit fee is if an audit reveals that the franchisee has underreported Gross Rooms Revenue by 2% or more. This implies that Sonesta Simply Suites closely monitors revenue reporting and has a threshold for discrepancies that will lead to further investigation.
Additionally, a Sonesta Simply Suites franchisee will be responsible for audit costs if the audit is necessitated by their failure to provide required reports, records, or other essential information. This provision underscores the importance of maintaining accurate and complete documentation and adhering to the franchisor's reporting requirements. Failing to do so can result in additional expenses for the franchisee.