What is the definition of 'Condemnation Termination' in the Sonesta Select Sonesta Essential franchise agreement?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
If, in our sole discretion, the taking is significant enough to render operation of your Hotel in accordance with this Agreement and the Brand Standards impractical, then we may terminate this Agreement on written notice, effective as of the day of the consummation of the actual taking (a "Condemnation Termination").
In the event of a Condemnation Termination, you will pay all amounts accrued prior to the effective date of the Condemnation Termination and follow the posttermination requirements set forth herein.
If such taking, in our business judgment, does not require the termination of this Agreement, then you will make all necessary modifications to make your Hotel conform to its condition, character and appearance immediately before such taking, according to Plans and Designs approved by us.
You will take all measures to ensure that the resumption of normal operations at your Hotel is not unreasonably delayed.
You will not be obligated to pay Lost Revenue Damages in the event of a Condemnation Termination.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, a 'Condemnation Termination' refers to the termination of the franchise agreement due to a taking of all or a significant portion of the hotel by eminent domain. If Sonesta Select Sonesta Essential determines, at its sole discretion, that the taking is significant enough to make operating the hotel impractical under the franchise agreement and brand standards, it can terminate the agreement with written notice. The termination becomes effective on the day the actual taking is completed.
In the event of a Condemnation Termination, the franchisee is required to pay all outstanding amounts that have accrued up to the termination date and must adhere to the post-termination requirements outlined in the franchise agreement. However, the franchisee will not be obligated to pay Lost Revenue Damages in this situation.
If Sonesta Select Sonesta Essential judges that the taking does not necessitate termination, the franchisee is responsible for making all necessary modifications to restore the hotel to its condition, character, and appearance immediately before the taking. These modifications must be based on plans and designs approved by Sonesta Select Sonesta Essential, and the franchisee must ensure that normal hotel operations resume without unreasonable delay.
This clause protects both Sonesta Select Sonesta Essential and the franchisee by outlining the procedures and responsibilities should the hotel property be taken by eminent domain. It provides a framework for either terminating the agreement with limited liability for the franchisee or continuing operations with necessary modifications to the property.