What is the EFT Authorization for Sonesta Select Sonesta Essential, and what fees are covered?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
- L. Method of Payment. You hereby authorize us to debit your checking, savings, or other account automatically for the Royalty, Brand Promotion Fee, and other amounts due to us or our affiliates (the "EFT Authorization").
You agree to sign and deliver to us any documents we require for such EFT Authorization.
Such EFT Authorization shall remain in full force and effect during the Term.
We will debit the account you designate for these amounts on their due dates (or the subsequent business day if the due date is a national holiday or a weekend day).
You agree to ensure that funds are available in your designated account to cover our withdrawals.
If we permit you to pay by any other means, we may require payment of our then-current alternative payment fee.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, the EFT Authorization allows Sonesta Select Sonesta Essential to automatically debit a franchisee's checking, savings, or other account for Royalty Fees, Brand Promotion Fees, and other amounts due to them or their affiliates. The franchisee must sign and deliver any documents required for this authorization, which remains in effect during the term of the agreement.
Sonesta Select Sonesta Essential will debit the designated account on the due dates, or the next business day if the due date falls on a national holiday or weekend. The franchisee is responsible for ensuring sufficient funds are available in the account to cover these withdrawals. If Sonesta Select Sonesta Essential permits payment by other means, they may charge an alternative payment fee.
This clause is standard in many franchise agreements, as it ensures timely payments and reduces administrative burdens for both parties. However, franchisees should carefully manage their account balances to avoid potential overdraft fees or penalties from Sonesta Select Sonesta Essential. Franchisees should also clarify what specific 'other amounts' beyond Royalty and Brand Promotion Fees might be debited through the EFT Authorization to avoid surprises.