According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, the amount of goodwill as of December 31, 2023, was $19,680. Goodwill is an intangible asset that arises when a buyer acquires an existing business. It represents the value of the acquired company's brand name, customer relationships, intellectual property, and any other factors that could translate into a competitive advantage.

For a prospective Sonesta Select Sonesta Essential franchisee, goodwill is an important factor to consider because it can affect the overall value of the franchise. A strong brand reputation and customer loyalty can help a new franchisee attract customers and generate revenue more quickly. However, it is important to note that goodwill is not a guarantee of future success. The value of goodwill can fluctuate over time depending on a variety of factors, such as changes in market conditions, increased competition, and negative publicity.

Sonesta Select Sonesta Essential tests goodwill for impairment each year, or more frequently if circumstances indicate that the fair value of the goodwill is less than its carrying amount. If the estimated fair value exceeds the carrying value, no impairment is recognized. However, if the carrying amount exceeds the fair value, an impairment loss is recognized, limited to the total goodwill balance. The fact that no impairment on goodwill was recognized during the years ended December 31, 2024, 2023, and 2022, may indicate stability in the brand's value.

It is important for potential franchisees to understand how Sonesta Select Sonesta Essential values and assesses goodwill, as this can impact the financial health and long-term prospects of their investment. While the FDD provides a snapshot of the company's goodwill at a specific point in time, prospective franchisees should conduct their own due diligence to assess the brand's reputation and market position in their target area.