Does the definition of 'transfer' for Sonesta Select Sonesta Essential include indirect assignments?

According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, the definition of "transfer" includes both direct and indirect assignments. Sonesta Select Sonesta Essential requires franchisee to get approval before transferring the agreement.

Specifically, the term "transfer" encompasses any voluntary, involuntary, direct, or indirect assignment, sale, gift, or other disposition of any interest in the franchise agreement itself, the franchisee entity, the hotel or its assets, or the owners of the franchisee if they are legal entities. This broad definition ensures that any change in ownership or control, whether direct or indirect, is subject to the franchisor's approval.

Furthermore, the FDD lists specific events that constitute an assignment, sale, gift, or other disposition. These include transfers of ownership interests such as capital stock, partnership interests, or membership interests, whether through public offerings or private placements. It also covers mergers, consolidations, the issuance of additional securities, and transfers of interests resulting from divorce, insolvency, death, or operation of law. Even pledging the franchise agreement or an ownership interest as security, or losing control of the hotel, are considered transfers. This comprehensive list leaves little room for franchisees to circumvent the transfer restrictions.

For a prospective Sonesta Select Sonesta Essential franchisee, this means that any change in the ownership or control structure of the franchise, no matter how indirect, will require the franchisor's prior written approval. Failing to obtain this approval constitutes a breach of the franchise agreement and renders the transfer ineffective. This provision protects Sonesta Select Sonesta Essential's interests by ensuring that any new owner or controlling party meets their standards and qualifications.