Besides the Initial Fee, what other payments must be current to Sonesta Select Sonesta Essential and its affiliates?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
A. Initial Fee. You must pay us at the time of your execution of this Agreement a nonrefundable initial fee in the amount of: (i) for a Sonesta Select -branded hotel, the greater of $65,000 or $500 per Guest Room (defined below), or (ii) for a Sonesta Essential -branded hotel, the greater of $45,000 or $500 per Guest Room (the "Initial Fee"). The Initial Fee must be paid to us by cashier's check, bank certified check, wire transfer, ACH, or credit card.
- B. Onboarding Administration Fee. You will pay us an onboarding administration fee of $5,000 for a Sonesta Select -branded hotel or $2,500 for a Sonesta Essential -branded hotel (or, if you are acquiring an existing Brand Hotel, a reduced fee of $2,500 for Sonesta Select -branded hotels and $2,000 for Sonesta Essential -branded hotels) for onboarding services we provide to you in connection with the opening of your Hotel under the Designated Brand Concept.
This fee is non-refundable and is due during or immediately after the onboarding process.
J. Room Addition Fee. If you add or construct additional Guest Rooms at your Hotel at any time after you sign this Agreement, you will pay us a nonrefundable fee equal to the greater of $500 per additional Guest Room or $5,000 (the "Room Addition Fee").
E. Professional Photography. You must arrange a professional photography session at your Hotel prior to the Opening Date. Further, if at any time during the Term your Hotel undergoes significant renovations or you make improvements in accordance with a PIP that we issue to you, we may require you to hire a professional photographer, approved by us, to conduct an additional photography session for your Hotel. All photography sessions will be at your sole expense and will be paid to us, unless we direct you to pay the third party vendor directly.
F. Help Desks. We will provide you with access to our IT and franchise services help desks, which support the owner's portal, support certain brand-authorized property management systems, and other Brand Hotel and Network Hotel assistance services. We periodically may modify the services provided by the help desks. Requests for certain support may incur a fee, the amount of which will be determined and agreed by you and us prior to initiation of such support.
You will pay to us such other fees designated in this Agreement, in the Brand Manual, or otherwise provided to you in writing, which may be made available to you electronically through the Franchise System's online franchisee portal. We have the right to rename certain programs, add or remove programs, and modify fees for various elements of the Franchise System and other services as described in the Brand
Manual, this Agreement or otherwise provided to you in writing, and upon 30 days' notice to you. If you request that we provide extraordinary services, such as amendments you request, amendments necessitated by your action or inaction, a lender comfort letter or other documentation outside the ordinary course of business, you must pay us an administrative fee for each such letter or document (currently $2,000 per lender comfort letter and up to $5,000 for other documentation, subject to Fee Adjustments), plus any additional costs we may incur in preparing or reviewing such documentation, including reasonable attorneys' fees.
We currently charge a loyalty program fee for your participation in the Sonesta Travel Pass program in the amount of 3% of your Hotel's Qualified Revenue (defined below) from guests participating in the Sonesta Travel Pass program, payable at the same time and in the same manner as Royalty Fees. We reserve the right, at any time, upon notice to you, to increase the loyalty program fee; provided, that the loyalty program fee that we impose shall not exceed 4.5% of your Hotel's Qualified Revenue.
- I. Interest on Late Payments. If any amount due from you hereunder is not paid when due, such non-payment will constitute a material breach of this Agreement.
In addition, we may assess a late payment charge of 1.5% per month or the maximum amount permitted by applicable law, whichever is less, on the unpaid amount beginning on the first day following the due date.
Should we engage legal counsel or other professionals in connection with any failure by you to pay when due any monies owed under this Agreement or submit when due any reports, information or supporting records, or in connection with any failure otherwise to comply with this Agreement, you will reimburse us on demand for all the above-listed costs and expenses we incur, whether or not a legal action or other proceeding is initiated.
If we permit you to pay by any other means, we may require payment of our then-current alternative payment fee.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, in addition to the initial franchise fee, franchisees must also pay an onboarding administration fee. This fee is $5,000 for a Sonesta Select-branded hotel or $2,500 for a Sonesta Essential-branded hotel. If acquiring an existing Brand Hotel, the fee is reduced to $2,500 for Sonesta Select and $2,000 for Sonesta Essential. This fee covers onboarding services provided during the hotel opening process and is non-refundable.
Sonesta Select Sonesta Essential franchisees must also pay a Room Addition Fee if they add or construct additional guest rooms after signing the agreement. This fee is the greater of $500 per additional guest room or $5,000. The fee is due when submitting an application for approval to add guest rooms, before entering any agreement to add rooms.
Other fees include a loyalty program fee for participation in the Sonesta Travel Pass program, set at 3% of the hotel's qualified revenue from guests in the program, payable like royalty fees. This fee can increase to a maximum of 4.5% of qualified revenue with notice. Franchisees may also incur fees for professional photography sessions, especially after significant renovations, and fees for specific support from IT and franchise services help desks, with amounts determined and agreed upon before the support is initiated. Additionally, franchisees may face administrative fees for extraordinary services like requested amendments or lender comfort letters, currently $2,000 per lender comfort letter and up to $5,000 for other documentation, plus legal fees.
If any amount due is not paid when due, Sonesta Select Sonesta Essential may assess a late payment charge of 1.5% per month or the maximum allowed by law, whichever is less, on the unpaid amount from the due date. Franchisees are also responsible for reimbursing Sonesta Select Sonesta Essential for costs and expenses, including attorney's fees, incurred due to failure to pay or comply with the agreement. Sonesta Select Sonesta Essential is authorized to debit franchisee accounts automatically for Royalty, Brand Promotion Fee, and other amounts due, requiring franchisees to maintain sufficient funds. If permitted to pay by other means, an alternative payment fee may apply.