What constitutes a material breach of the Sonesta Select Sonesta Essential agreement regarding payments?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
You acknowledge that this Section 3.I is not our agreement to accept any payments after they are due or our commitment to extend credit to, or otherwise finance your operation of, your Hotel.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, failure to make payments when due constitutes a material breach of the franchise agreement. Specifically, if any amount due from the franchisee is not paid on time, it is considered a material breach.
In addition to being a material breach, Sonesta Select Sonesta Essential may also 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. This charge begins accruing on the first day following the original due date.
Furthermore, if Sonesta Select Sonesta Essential has to engage legal counsel or other professionals to address the franchisee's failure to pay or comply with the agreement, the franchisee will be responsible for reimbursing all associated costs and expenses incurred by Sonesta Select Sonesta Essential. This reimbursement is required whether or not a formal legal action is initiated. The franchise agreement explicitly states that this payment policy does not obligate Sonesta Select Sonesta Essential to accept late payments or extend credit to finance the franchisee's hotel operation.