Who is included in the term 'Holder' as used in the Note for Sonesta Select Sonesta Essential?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
- d.
As used in this Note, the term "Holder" shall include any subsequent holder of or participant in this Note.
Holder may assign this Note in whole or in part.
Holder may make available to any proposed assignee or participant all credit and financial data with respect to Maker as may be in the possession of Holder.
Maker agrees to provide any additional information that any proposed assignee or participant may reasonably request.
Source: Item 23 — RECEIPTS (FDD pages 84–261)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, the term "Holder" in the context of a Note includes any subsequent holder of or participant in that Note. This means that the original holder of the Note can transfer or assign the Note to another party, and that new party then assumes the rights and responsibilities of the Holder. This also includes participants in the note.
For a prospective Sonesta Select Sonesta Essential franchisee, this is important because it clarifies that the franchisor can transfer the financial instrument (the Note) to another entity. This could be a bank, a financial institution, or any other third party. The franchisee, as the Maker of the Note, would then be obligated to fulfill the terms of the Note to this new Holder.
This clause also specifies that the Holder may assign the Note in whole or in part. This means Sonesta Select Sonesta Essential could sell off portions of the debt to multiple parties. The Holder can also share credit and financial data about the Maker (the franchisee) with potential assignees or participants, and the Maker agrees to provide any additional information reasonably requested by these parties. This allows the Holder to assess the risk associated with the Note before acquiring it.