Sonesta Simply Suites
Bottom line
- Total investment $14.0M – $19.2M including a $50K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $2.1M/year (median $1.9M).
- Rated MODERATE with a risk score of 67/100. SBA loan default rate of 0.0% across 6 loans (below the industry average).
- 22 litigation matters disclosed in Item 3 — higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Sonesta Simply Suites unit return on the cash you put in?
Unlevered ROIC · per unit
1%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Sonesta Simply Suites units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.9M
on $9.6M purchase
Total debt
$7.7M
SBA $4.8M + senior + seller note
Overview
About
Franchisees develop and operate select-service extended-stay hotel properties under the Sonesta Simply Suites brand. Day-to-day operations include managing housekeeping, front desk, maintenance, and revenue optimization across a typically 100+ room inventory while adhering to brand standards. Franchisees retain responsibility for property-level P&L, staffing, and guest satisfaction, with revenue concentrated in nightly room rates (subject to the 5% royalty).
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 15 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Sonesta Simply Suites presents elevated risk: undisclosed unit economics, explosive unit growth masking potential retention issues, substantial litigation history, and lack of territorial protection in a capital-intensive hospitality franchise with no going concern statement.
Score breakdown · what drove the 67 / 100 rating
- 01MEDNo Item 19 (Average Unit Volume) disclosed — cannot validate $2.13M average revenue claim or profitability
- 02MINORAggressive unit growth (235% YoY) suggests recruitment over retention; sustainability unclear
- 03MED22 disclosed lawsuits including tortious interference with Radisson and 14 breach/collection cases against franchisees — indicates systemic franchisor-franchisee conflict
- 04MEDHigh initial investment ($14M–$19.2M) paired with 5% royalty on gross rooms revenue leaves limited margin for error
- 05MINORNo protected territory in hospitality market creates direct competition risk between franchisees
- 06HIGH20-year term locks capital long-term with no going concern assurances from parent company
- 07MINOR235% YoY unit growth is unsustainable and may reflect franchise recruitment bubble rather than organic success
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
25 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Sonesta Simply Suites · FDD (2026) PDF