Who may use the Brand Promotion Fees collected from Sonesta Simply Suites franchisees?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
er your cost of participating in any optional marketing programs and promotions we may offer.
We and our affiliates will account for Brand Promotion Fees separately from our other funds, though we are not obligated to maintain them in a separate account. We and our affiliates may use Brand Promotion Fees to reimburse us or our affiliates or designees for the salaries and benefits of personnel who directly or indirectly manage and administer the brand promotion programs, associated administrative costs, travel expenses of personnel while they are on corresponding business, meeting costs, overhead relating to the brand promotion programs, and other expenses that we incur in activities related to administering or directing brand promotion programs, including conducting market research, public relations, preparing advertising, promotion, and marketing materials, and collecting and accounting for Brand Promotion Fees. Brand Promotion Fees will not be used principally to solicit new franchise sales.
The brand promotion programs are not a trust and the Brand Promotion Fees do not bear interest. We do not owe any fiduciary obligation to you for administering the brand promotion program or any other reason. Our spending of the Brand Promotion Fees in any fiscal year may be more or less than the total Brand Promotion Fees collected by us in such year, and the brand promotion programs may borrow from us or others (paying reasonable interest) to cover deficits, or invest surplus for future use.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 48–60)
What This Means (2025 FDD)
According to the 2025 Sonesta Simply Suites FDD, Sonesta Simply Suites and its affiliates have the authority to utilize the Brand Promotion Fees. These fees can be used to cover a range of expenses related to managing and administering brand promotion programs. This includes reimbursing Sonesta Simply Suites or its affiliates for personnel salaries and benefits, administrative costs, travel expenses, meeting costs, and overhead related to these programs.
The Brand Promotion Fees are also used for activities such as conducting market research, public relations, preparing advertising and marketing materials, and managing the collection and accounting of these fees. However, the FDD specifies that these fees will not be used primarily for soliciting new franchise sales. In 2024, the Brand Promotion Fees were allocated as follows: 42% for media placement, 38% for production, 7% for administrative expenses, and 13% for other purposes, including support for the global sales program.
Sonesta Simply Suites maintains control over how these fees are spent, including the creative aspects of advertising and marketing programs, the media channels used, and the geographic areas targeted. The brand promotion programs are not structured as a trust, and the fees do not accrue interest. Sonesta Simply Suites does not have a fiduciary obligation regarding the administration of the brand promotion program. The FDD also states that Sonesta Simply Suites's spending of Brand Promotion Fees in any fiscal year may be more or less than the total Brand Promotion Fees collected in that year, and the programs may borrow funds or invest surplus for future use.