Against whom can a Sonesta Select Sonesta Essential franchisee bring claims arising between the parties?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
equent to and notwithstanding the expiration or termination of this Agreement.
Any provisions of this Agreement below that pertain to judicial proceedings shall be subject to the agreement to arbitrate contained in this Section. Notwithstanding the foregoing, nothing in this Section shall prohibit either party from filing a claim in court for collection of amounts owed to it, in accordance with Section 17.H.
- G. Governing Law. Except to the extent governed by the Federal Arbitration Act, the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. Sections 1051 et seq.), or other United States federal law, this Agreement or any related agreements, the Franchise, and all claims arising from the relationship between us (or any of our affiliates, and our and their respective owners, officers, directors, agents, representatives, and employees) and you (and your owners, guarantors, affiliates, and employees), whether couched in tort or contract, will be governed by the laws of the Commonwealth of Massachusetts, without regard to its conflict of laws rules, except that any state law regulating the offer or sale of franchises or governing the relationship of a franchisor and its franchisee will not apply unless its jurisdictional requirements are met independently without reference to this Section. If any of the provisions of this Agreement which relate to restrictions on you and your owners' competitive activities are found unenforceable under Massachusetts law, the enforceability of those provisions will be governed by the laws of the state in which your Hotel is located.
- H.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, claims arising from the relationship between the franchisee and Sonesta Select Sonesta Essential (or its affiliates, owners, officers, directors, agents, representatives, and employees) can be brought against those parties. This includes claims couched in tort or contract. The agreement specifies that these claims will be governed by the laws of the Commonwealth of Massachusetts, except where federal law like the Federal Arbitration Act or the United States Trademark Act applies. Additionally, state laws regulating franchise offers, sales, or franchisor-franchisee relationships will only apply if their jurisdictional requirements are met independently.
This means a Sonesta Select Sonesta Essential franchisee can potentially bring claims against a wide range of parties affiliated with the franchisor, not just the franchisor entity itself. This could include individuals like officers or directors, as well as affiliated companies. The franchisee's owners, guarantors, affiliates, and employees are also included in this scope.
However, the agreement also includes an agreement to arbitrate, which may limit the franchisee's ability to bring claims in court. There is an exception for claims filed in court for the collection of amounts owed. The document also states that Red Lion Hotels Corporation guarantees the performance of Sonesta RL Hotels Franchising Inc. This means that a franchisee may also have recourse against Red Lion Hotels Corporation for the obligations of Sonesta RL Hotels Franchising Inc. under the franchise agreement.