What are 'De-Identification Damages' in the context of a terminated Sonesta Select Sonesta Essential franchise agreement?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
ost Revenue Damages, as calculated in accordance with this Section, within fifteen (15) days after this Agreement is terminated, or on any later date that we determine. You and we agree that the calculation described in this Section is a calculation only of the Lost Revenue Damages and that nothing herein shall preclude us or limit us from proving and recovering any other damages caused by your breach of this Agreement.
- (2) De-Identification Damages. If within 30 days after the termination or expiration of this Agreement, you fail to comply with your obligations under Section 14.C.(2), we or our agents, at your expense, may enter the Premises of your Hotel to comply with the provisions of Section 14.C.(2), without being deemed guilty of or liable for trespass or any other tort, and make or cause to be made such changes at your expense. You will pay us $500 for each day in which you are in breach of your de-identification obligations under this Agreement, plus all expenses that we incur, upon demand. If you are selling or otherwise transferring your Hotel to a third-party who does not desire to operate your Hotel as a Brand Hotel using the Marks, you must complete all your d
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to the 2025 FDD, De-Identification Damages for a Sonesta Select Sonesta Essential franchise relate to the franchisee's obligation to remove all branding and trademarks from the hotel premises after the franchise agreement terminates or expires. If a franchisee fails to meet these obligations within 30 days, Sonesta Select Sonesta Essential has the right to enter the premises and complete the de-identification process at the franchisee's expense.
Specifically, the franchisee will pay Sonesta Select Sonesta Essential $500 for each day they are in breach of their de-identification obligations, in addition to covering all expenses incurred by Sonesta Select Sonesta Essential to rectify the situation. This includes the cost of labor, materials, and any other resources required to remove the branding and ensure the property no longer represents a Sonesta Select Sonesta Essential hotel.
Furthermore, if the franchisee is selling or transferring the hotel to a third party who will not operate it as a Sonesta Select Sonesta Essential branded hotel, the de-identification must be completed before the sale closes. Failure to comply with these de-identification obligations allows Sonesta Select Sonesta Essential and its affiliates to recover all losses, costs, expenses, and damages resulting from the failure. Sonesta Select Sonesta Essential can also seek an injunction or other legal remedies to enforce their rights.
This clause protects Sonesta Select Sonesta Essential's brand integrity and prevents consumer confusion by ensuring that terminated or sold locations do not continue to represent themselves as part of the Sonesta Select Sonesta Essential system without authorization. The financial penalties and the right for Sonesta Select Sonesta Essential to take corrective action at the franchisee's expense are designed to ensure prompt and complete compliance with de-identification requirements.