Is the arbitration location for Sonesta Select Sonesta Essential disputes subject to state law?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN | SUMMARY |
|---|---|---|
| FRANCHISE AGREEMENT | ||
| u. Dispute | Section 17.F | We and you must arbitrate all disputes (except for claims to collect amounts |
| resolution by | owed) at a location within 50 miles of our or, as applicable, our successor’s | |
| arbitration or | or assign’s then-current principal place of business (currently, Newton, | |
| mediation | Massachusetts) (subject to state law). |
Source: Item 17 — **RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 70–75)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, the location for dispute resolution through arbitration is subject to state law. Specifically, all disputes between Sonesta Select Sonesta Essential and the franchisee (excluding claims to collect owed amounts) must be arbitrated at a location within 50 miles of the franchisor's (or their successor's/assign's) principal place of business, which is currently in Newton, Massachusetts. However, this is explicitly noted as being 'subject to state law'.
This means that while Sonesta Select Sonesta Essential specifies a preferred arbitration location, state laws could potentially override or modify this requirement. For example, some states may have regulations that ensure a more convenient or neutral arbitration venue for the franchisee, regardless of the franchisor's primary business location. Franchisees should be aware of the laws in their specific state that might affect the enforceability of the arbitration location clause.
Prospective franchisees should consult with a legal professional to understand how state laws might impact the arbitration process and location. It is important to determine whether the state in which the franchise will operate has any specific statutes that could supersede the arbitration terms outlined in the franchise agreement. This due diligence can help franchisees prepare for potential disputes and ensure they understand their rights and obligations regarding dispute resolution.