Under what conditions can the License Agreement between Sonesta and Sonesta Simply Suites be terminated?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
We and Sonesta entered into a License Agreement dated September 23, 2021 (the "License Agreement"), which grants us the right to use and sublicense to our franchisees the right to use the Marks. The term of the License Agreement is for 99 years unless either party gives notice of termination before the end of such term. If the License Agreement expires or is terminated while your Franchise Agreement is in effect, you will be allowed to continue to use the marks until your Franchise Agreement expires or is terminated.
Source: Item 13 — TRADEMARKS (FDD pages 62–64)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, the License Agreement between Sonesta and Sonesta Simply Suites, dated September 23, 2021, has a term of 99 years. However, either party (Sonesta or Sonesta Simply Suites) can terminate the agreement before the end of the 99-year term by providing notice of termination.
For a prospective Sonesta Simply Suites franchisee, this is important because the License Agreement grants Sonesta Simply Suites the right to use and sublicense the trademarks to its franchisees. If the License Agreement were to expire or be terminated, the franchisee's right to use the marks would continue until the individual Franchise Agreement expires or is terminated.
This clause provides some security for franchisees, ensuring they can continue operating under the Sonesta Simply Suites brand even if the overarching License Agreement between Sonesta and Sonesta Simply Suites is terminated. However, it would be prudent for a potential franchisee to understand the specific conditions under which either party might choose to terminate the License Agreement and what protections are in place for franchisees in such a scenario.