If a Sonesta Select Sonesta Essential franchisee's owner dies, is that considered a transfer?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
- (10) you or the transferee pays us a transfer fee equal to the Initial Fee as provided in Section 3.A of this Agreement.
However, no transfer fee is due if, upon a spouse's death, that spouse's interest in this Agreement and your Hotel, or ownership in you, is transferred to the surviving spouse, provided that such transfer is subject to the terms and conditions of this Section 12;
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, a transfer includes a voluntary, involuntary, direct, or indirect assignment, sale, gift, or other disposition of any interest in the franchise agreement, the franchisee, the hotel or its assets, or the franchisee's owners. However, a specific exception exists regarding the death of a spouse.
Specifically, if a spouse's interest in the Franchise Agreement and the hotel, or ownership in the franchisee, is transferred to the surviving spouse upon death, no transfer fee is due. This exception is contingent upon the transfer adhering to the terms and conditions outlined in Section 12 of the agreement. This means that while the death of an owner generally triggers transfer considerations, the transfer to a surviving spouse is treated differently, offering a significant benefit by waiving the transfer fee.
It is important to note that even in the case of spousal transfer after death, the surviving spouse must still meet the conditions specified in Section 12 of the franchise agreement. These conditions likely involve demonstrating the ability to operate the hotel and complying with other requirements to ensure the continued success and standards of the Sonesta Select Sonesta Essential franchise. This provision ensures business continuity while providing some relief to the surviving spouse.