Under what conditions is a sale of a Sonesta Simply Suites hotel considered a change of ownership?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
You may sell, lease, or transfer your Hotel, your Hotel site, or any portion thereof if, in our reasonable judgment, after the sale, you retain possession and control of your Hotel site and the management control of your Hotel operations and continue to comply with the requirements of Section 7.A, provided you give us at least 60 days' prior notice of the proposed transfer, and any information related to the Transfer that we may reasonably require.
If, in our reasonable judgment, the Transfer will result either in (a) your loss of possession or control of your Hotel or Hotel site or management of your Hotel, or (b) a material change in your financial condition, the sale will then be considered a change of ownership and you must comply with the provisions of Section 12.C.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to the 2025 Sonesta Simply Suites Franchise Disclosure Document, a sale, lease, or transfer of a hotel, hotel site, or any portion thereof is considered a change of ownership if the transfer results in either the franchisee's loss of possession or control of the hotel or hotel site, or loss of management of the hotel. It is also considered a change of ownership if there is a material change in the franchisee's financial condition.
If a transfer is deemed a change of ownership, the franchisee must comply with the provisions outlined in Section 12.C of the franchise agreement. This section likely details the specific requirements and procedures that must be followed when a change of ownership occurs, such as obtaining the franchisor's approval and fulfilling certain conditions.
However, if the franchisee retains possession and control of the hotel site and maintains management control of the hotel operations after the sale, and continues to meet the requirements of Section 7.A of the franchise agreement, the sale may not be considered a change of ownership. In this case, the franchisee must still provide Sonesta Simply Suites with at least 60 days' prior notice of the proposed transfer and any related information that the franchisor may reasonably require.