What disputes relating to the Sonesta Select Sonesta Essential franchise must be arbitrated?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN | SUMMARY |
|---|---|---|
| FRANCHISE AGREEMENT | ||
| s. Modification of | Section 17.K | No modifications of the Franchise Agreement except by written agreement, |
| the agreement | except that we may modify the Brand Manual and Brand Standards. | |
| t. Integration / merger clause | Section 17.N | Only the terms of Franchise Agreement, including its attachments and the Brand Standards, are binding (subject to state law). Any representations or promises outside of this Disclosure Document and the Franchise Agreement may not be enforceable. |
| u. Dispute | Section 17.F | We and you must arbitrate all disputes (except for claims to collect amounts |
| resolution by | owed) at a location within 50 miles of our or, as applicable, our successor’s | |
| arbitration or | or assign’s then-current principal place of business (currently, Newton, | |
| mediation | Massachusetts) (subject to state law). | |
| v. Choice of forum | Sections 17.H and 17.J | Subject to the arbitration requirement, litigation must be brought in the court nearest to our or, as applicable, our successor’s or assign’s then current principal place of business (currently, Newton, Massachusetts) (subject to state law). However, we may seek injunctive relief in any court of competent jurisdiction. |
| w. Choice of law | Section 17.G | Except for the U.S. |
Source: Item 17 — **RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 70–75)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, disputes between the franchisee and franchisor must be arbitrated, with a specific exception. All disputes must be arbitrated except for claims to collect amounts owed to Sonesta Select Sonesta Essential. The arbitration location must be within 50 miles of Sonesta Select Sonesta Essential's principal place of business, which is currently in Newton, Massachusetts, or that of their successor or assignee. This is subject to state law.
This means that if a franchisee has a disagreement with Sonesta Select Sonesta Essential about almost any aspect of the franchise agreement (other than amounts Sonesta Select Sonesta Essential claims the franchisee owes them), they will have to resolve it through arbitration rather than through a lawsuit. Arbitration typically involves a neutral third party who hears both sides of the dispute and makes a decision. This decision is often binding, meaning that both parties must abide by it.
However, Sonesta Select Sonesta Essential retains the right to seek injunctive relief in any court of competent jurisdiction, regardless of the arbitration requirement. This allows Sonesta Select Sonesta Essential to pursue legal action to stop a franchisee from doing something that could cause immediate and irreparable harm to the brand or the franchise system, such as violating brand standards or misusing confidential information. The Franchise Agreement specifies that Massachusetts law governs the agreement, except for matters covered by the U.S. Trademark Act, the Federal Arbitration Act, and other federal laws.