What is being assigned in the Collateral Assignment of Online Presences for a Sonesta Select Sonesta Essential franchise?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
FOR VALUE RECEIVED, Franchisee hereby assigns to Franchisor all websites, domain names, homepages, e-mail addresses, social media accounts, usernames, other online presence or presence on any electronic, virtual, or digital medium of any kind (each an "Online Presence") associated with Franchisor's trademarks and service marks and used from time to time in connection with the operation of the Franchised Business at the address provided above. This Assignment is for collateral purposes only and, except as specified herein, Franchisor shall have no liability or obligation of any kind whatsoever arising from or in connection with this Assignment, unless Franchisor shall notify the companies managing the Online Presences (the "Service Providers") and Franchisee's Internet service provider ("ISP") to effectuate the assignment pursuant to the terms hereof.
Upon termination or expiration of the Franchise Agreement (without extension), Franchisor shall have the right and is hereby empowered to effectuate the assignment of the Online Presences. In such event, Franchisee shall have no further right, title, or interest in the Online Presences, and shall remain liable to the Service Providers and the ISP for all past due fees owing to the Service Providers and the ISP on or before the effective date of the assignment hereunder.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, the Collateral Assignment of Online Presences for a Sonesta Select Sonesta Essential franchise involves the franchisee assigning to the franchisor all websites, domain names, homepages, e-mail addresses, social media accounts, usernames, and any other online presence associated with the franchisor's trademarks and service marks. This assignment pertains to the online presence used in connection with the operation of the franchised business. The document specifies that this assignment is for collateral purposes only, and the franchisor has no liability or obligation unless they notify the companies managing the online presences and the franchisee's Internet service provider to effectuate the assignment.
Upon termination or expiration of the franchise agreement, Sonesta Select Sonesta Essential has the right to effectuate the assignment of the online presences. At that point, the franchisee loses all rights, title, and interest in the online presences. The franchisee remains responsible for all past due fees owed to the service providers and the ISP up to the effective date of the assignment.
This arrangement ensures that Sonesta Select Sonesta Essential maintains control over its brand's online representation. It also allows for a smooth transition of online assets if the franchise agreement ends. A prospective franchisee should understand that they will not own the online presence associated with the brand and must transfer control of these assets back to the franchisor upon termination or expiration of the agreement.