What is the exception to the arbitration requirement for Sonesta Select Sonesta Essential disputes?
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). |
Source: Item 17 — **RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 70–75)
What This Means (2025 FDD)
According to the 2025 FDD, Sonesta Select Sonesta Essential requires franchisees to arbitrate disputes, but there is an exception for claims to collect amounts owed. This means that if Sonesta Select Sonesta Essential is trying to collect money that a franchisee owes, they are not required to go through arbitration and can pursue other legal avenues.
This exception is important for prospective franchisees to understand because it clarifies the circumstances under which Sonesta Select Sonesta Essential may choose to litigate rather than arbitrate. While most disputes must go through arbitration, Sonesta Select Sonesta Essential retains the right to pursue collections through the courts.
It is also important to note that the arbitration location is within 50 miles of Sonesta Select Sonesta Essential's principal place of business, which is currently in Newton, Massachusetts. However, these dispute resolutions are subject to state law, so franchisees should be aware of the laws in their specific state.