What is the amount of the transfer fee for a Sonesta Select Sonesta Essential franchise, and where is it specified in the agreement?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
- (10) you or the transferee pays us a transfer fee equal to the Initial Fee as provided in Section 3.A of this Agreement.
However, no transfer fee is due if, upon a spouse's death, that spouse's interest in this Agreement and your Hotel, or ownership in you, is transferred to the surviving spouse, provided that such transfer is subject to the terms and conditions of this Section 12;
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, a franchisee who wishes to transfer their franchise must pay a transfer fee. This fee is equal to the initial franchise fee, as detailed in Section 3.A of the franchise agreement.
The initial fee for a Sonesta Select-branded hotel is the greater of $65,000 or $500 per Guest Room. For a Sonesta Essential-branded hotel, the initial fee is the greater of $45,000 or $500 per Guest Room. Therefore, the transfer fee will be the same amount that a new franchisee would pay as an initial fee, based on the brand and number of guest rooms.
However, there is an exception to the transfer fee. If a spouse dies and their interest in the franchise agreement and hotel is transferred to the surviving spouse, no transfer fee is due, provided that the transfer complies with Section 12 of the agreement. This provides a measure of financial relief in the event of a franchisee's death, allowing the surviving spouse to continue operating the business without incurring an additional fee.