What is the consideration provided by the Sonesta Select Sonesta Essential franchisee for the release and covenant not to sue?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
| Sonesta RL Hotels Franchising Inc. ("we," "us," or "our") and the undersigned franchisee, |
|---|
| ("you" or "your"), currently are parties to a certain Franchise Agreement (the "Franchise |
| Agreement") dated |
| , |
| . You have asked us to take the following action |
| or to agree to the following request: [insert as appropriate] |
| We have the right |
| under the Franchise Agreement to obtain a general release from you (and, if applicable, your owners) as a |
| condition of taking this action or agreeing to this request. Therefore, we are willing to take the action or |
| agree to the request specified above if you (and, if applicable, your owners) give us the release and |
| covenant not to sue provided below in this document. You (and, if applicable, your owners) are willing to |
| give us the release and covenant not to sue provided below as partial consideration for our willingness to |
Source: Item 23 — RECEIPTS (FDD pages 84–261)
What This Means (2025 FDD)
According to the 2025 FDD, Sonesta Select Sonesta Essential requires franchisees to provide a release and covenant not to sue as partial consideration for specific actions or requests made by the franchisee. This means that in exchange for Sonesta Select Sonesta Essential agreeing to take a certain action or fulfill a request from the franchisee, the franchisee must agree to release Sonesta Select Sonesta Essential from any present or future claims and promise not to sue them. This requirement extends not only to the franchisee but also, if applicable, to the franchisee's owners.
The release covers all claims, demands, causes of action, suits, duties, obligations, actions, liabilities, defenses, or damages of any kind, whether known or unknown, that the franchisee or their related parties may have against Sonesta Select Sonesta Essential. This includes claims arising from any relationship or transaction with Sonesta Select Sonesta Essential, including those related to the Franchise Agreement or the operation of the hotel. The franchisee also warrants that they have not assigned or transferred any claims released by this agreement.
It is important to note that the FDD includes specific stipulations for franchisees located in or residents of California, Maryland, Minnesota and Washington, addressing the waiver of certain rights and liabilities under state franchise laws. Specifically, the California Civil Code Section 1542 is addressed, ensuring the franchisee acknowledges the release of unknown claims. For Maryland, Minnesota and Washington franchisees, any general release does not apply to liabilities under their respective state's Franchise Registration and Disclosure Laws. Prospective franchisees should carefully review these provisions and consult with legal counsel to understand the full implications of the release and covenant not to sue, especially in light of their state's franchise laws.