What happens if the identity of the Principal for a Sonesta Select Sonesta Essential franchise changes?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree to deliver to us a revised Exhibit A to accurately identify the Principal should the identity of that person change during the Term as permitted hereunder;
- (6) If you are an Entity, the Principal and the Management Company, as defined in Section 8.D, if applicable, are authorized, on your behalf, to deal with us in respect of all matters whatsoever which may arise in respect of this Agreement.
Any decision made by the Principal or the Management Company will be final and binding upon you, and we will be entitled to rely solely upon the decision of the Principal or Management Company in any such dealings without the necessity of any discussions with any other party named in this Agreement, and we will not be held liable for any actions taken by you, based upon any decision or actions of the Principal or Management Company; and
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, if the identity of the Principal for a Sonesta Select Sonesta Essential franchise changes during the term of the agreement, the franchisee must provide a revised Exhibit A to Sonesta Select Sonesta Essential. This revised exhibit should accurately reflect the new Principal's identity.
This requirement ensures that Sonesta Select Sonesta Essential is always aware of who is authorized to act on behalf of the franchise. The Principal is authorized to deal with Sonesta Select Sonesta Essential on all matters related to the franchise agreement. Any decision made by the Principal is considered final and binding, and Sonesta Select Sonesta Essential is entitled to rely solely on the Principal's decisions without needing to consult with any other party named in the agreement.
This clause protects Sonesta Select Sonesta Essential from liability for actions taken by the franchisee based on the Principal's decisions. It also streamlines communication and decision-making processes, as Sonesta Select Sonesta Essential only needs to interact with the designated Principal. Franchisees need to ensure that any changes in the Principal's identity are promptly communicated to Sonesta Select Sonesta Essential to maintain compliance with the franchise agreement.