When is the initial fee due for a Sonesta Select Sonesta Essential franchise?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
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Initial Fee
You must pay us an initial fee equal to: the greater of $65,000 or $500 per Guest Room (as defined below) for a Sonesta Select-branded hotel, or equal to the greater of $45,000 or $500 per Guest Room for a Sonesta Essential-branded hotel (the "Initial Fee"), when you sign the Franchise Agreement. The Initial Fee is fully earned and non-refundable and must be paid before we will countersign the Franchise Agreement.
"Guest Room" means each rentable unit in your Hotel generally used for overnight guest accommodations, the entrance to which is controlled by the same key. Adjacent Guest Rooms with connecting doors that can be rented as separate units are considered separate Guest Rooms. The initial number of approved Guest Rooms will be identified on Exhibit A to the Franchise Agreement.
Source: Item 5 — INITIAL FEES (FDD pages 23–24)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, the initial franchise fee is due when you sign the Franchise Agreement. This fee is non-refundable and must be paid before Sonesta Select Sonesta Essential will countersign the Franchise Agreement. The initial fee is the greater of $65,000 or $500 per Guest Room for a Sonesta Select-branded hotel, or the greater of $45,000 or $500 per Guest Room for a Sonesta Essential-branded hotel.
In addition to the initial franchise fee, there are other fees that a franchisee will need to pay when signing the Franchise Agreement. A fee of $1,500 is required for the initial brand training. If the training is in-person, the franchisee must also reimburse Sonesta Select Sonesta Essential for personnel's travel, meals, and lodging expenses, which are estimated to be up to $2,500.
Prospective franchisees should be aware of these payment terms and factor them into their initial investment calculations. Understanding when fees are due is crucial for managing cash flow during the initial stages of establishing a Sonesta Select Sonesta Essential franchise. Franchisees should also inquire about any potential financing options that may be available to cover these upfront costs.