What is the effect of the Rider on Section 14.A of the Sonesta Select Sonesta Essential Franchise Agreement?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS RIDER is by and between SONESTA RL HOTELS FRANCHISING INC. a Washington corporation with its principal business address at 400 Centre Street, Newton, Massachusetts 02458 ("we," "us," or "our"), and , whose |
|---|
| principal business address is |
| ("you" or "your"). |
| 1. |
| BACKGROUND. We and you are parties to that certain Franchise Agreement dated |
| (the "Franchise Agreement") that has been signed concurrently |
| with the signing of this Rider. This Rider is annexed to and forms part of the Franchise Agreement. This |
| Rider is being signed because the Hotel that you will operate under the Franchise Agreement will be |
| established or maintained in Virginia. |
| 2. |
| TERMINATION BY EITHER PARTY. The following language is added to Section 14.A of |
| the Franchise Agreement: |
| Under Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor |
| to cancel a franchise without reasonable cause. If any grounds for default or termination |
| stated in the Franchise Agreement does not constitute "reasonable cause," as that term |
| may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision |
| may not be enforceable. |
Source: Item 23 — RECEIPTS (FDD pages 84–261)
What This Means (2025 FDD)
According to the 2025 Sonesta Select Sonesta Essential Franchise Disclosure Document, a rider modifies Section 14.A of the franchise agreement for franchisees operating in Virginia. The rider adds language clarifying that under Section 13.1-564 of the Virginia Retail Franchising Act, Sonesta Select Sonesta Essential cannot terminate a franchise without reasonable cause.
This addition means that if any grounds for default or termination stated in the Franchise Agreement do not constitute "reasonable cause" as defined by the Virginia Retail Franchising Act or Virginia laws, that specific provision may not be enforceable. This provides an additional layer of protection for franchisees in Virginia against potentially unreasonable termination by Sonesta Select Sonesta Essential.
In practical terms, this rider ensures that Sonesta Select Sonesta Essential must adhere to Virginia law regarding franchise terminations, offering Virginia franchisees greater security and legal recourse if they believe a termination is unjust. Prospective franchisees in Virginia should carefully review the Virginia Retail Franchising Act to understand what constitutes "reasonable cause" for termination under state law.