What happens if the identity of the Principal for a Sonesta Select Sonesta Essential franchisee 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 franchisee changes during the term of the agreement, the franchisee must provide a revised Exhibit A to the franchisor. This exhibit should accurately reflect the new Principal.
This requirement ensures that Sonesta Select Sonesta Essential is always aware of who is authorized to act on behalf of the franchisee entity. The Principal and any designated Management Company are authorized to handle all matters related to the franchise agreement. Sonesta Select Sonesta Essential can rely on their decisions without needing to consult other parties involved in the agreement.
Sonesta Select Sonesta Essential is not liable for actions taken by the franchisee based on decisions or actions of the Principal or Management Company. This clause protects Sonesta Select Sonesta Essential from potential disputes arising from internal management decisions within the franchisee's organization. It is the franchisee's responsibility to ensure that the Principal and Management Company act in accordance with the franchise agreement and all applicable laws.
This provision is typical in franchise agreements, as franchisors need a clear point of contact and decision-maker within the franchisee's organization to ensure smooth communication and compliance with the franchise terms.