What is the definition of 'Equity Interest' in the Sonesta Select Sonesta Essential franchise agreement?

According to the 2025 Franchise Disclosure Document, the Sonesta Select Sonesta Essential franchise agreement defines "Equity Interest" as any direct or indirect beneficial interest in the franchisee. This definition is important because it clarifies the scope of ownership and control that Sonesta Select Sonesta Essential considers relevant under the agreement.

This definition has implications for various aspects of the franchise relationship, particularly concerning transfers, ownership changes, and compliance with the agreement's terms. For example, if a franchisee intends to transfer any portion of their equity interest, whether directly or indirectly, they would likely need to comply with specific procedures and obtain approval from Sonesta Select Sonesta Essential, as outlined in other sections of the franchise agreement.

Furthermore, the definition of "Equity Interest" plays a role in scenarios such as public or private offerings of securities. Sonesta Select Sonesta Essential requires franchisees to submit any written information intended for raising funds to them for review, especially if it references Sonesta Select Sonesta Essential or its affiliates. This is to protect the brand's image and ensure accurate representation in financial documents. The franchisor also retains the right to approve any descriptions of the franchise agreement or the relationship with Sonesta Select Sonesta Essential in prospectuses or other communications related to securities offerings.