What costs are included in the Indemnification fee for a Sonesta Select Sonesta Essential franchise?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS (Note 1) |
|---|---|---|---|
| Indemnification | Varies | Case by case basis as incurred | You must reimburse us if we are held liable for claims arising from the development or operation of your Hotel, the business you conduct under the Franchise Agreement, any default under your Franchise Agreement, and/or your employment practices or that are instituted by your employees, including attorneys' fees and court costs we reasonably incur to protect us, our parent, subsidiaries, or affiliates. |
| TYPE OF FEE | AMOUNT | DUE DATE |
Source: Item 6 — OTHER FEES (FDD pages 24–36)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, the indemnification fee covers various costs the franchisor may incur due to the franchisee's actions or inactions. Specifically, if Sonesta Select Sonesta Essential is held liable for claims arising from the development or operation of the franchisee's hotel, the business conducted under the Franchise Agreement, any default under the Franchise Agreement, and/or the franchisee's employment practices or those instituted by their employees, the franchisee must reimburse Sonesta Select Sonesta Essential.
This reimbursement includes attorneys' fees and court costs that Sonesta Select Sonesta Essential reasonably incurs to protect itself, its parent company, subsidiaries, or affiliates. The indemnification fee is assessed on a case-by-case basis as these costs are incurred.
For a prospective Sonesta Select Sonesta Essential franchisee, this means they are responsible for covering Sonesta Select Sonesta Essential's legal expenses and any other related costs if a claim or lawsuit arises due to their hotel's operations, breaches of the franchise agreement, or employment-related issues. This could potentially amount to a significant and unpredictable expense, depending on the nature and severity of the claim. Franchisees should ensure they operate their business in compliance with all applicable laws and the franchise agreement to minimize the risk of incurring such fees.