To whom are the insurance costs paid for a Sonesta Select Sonesta Essential hotel?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
t needed for the location, and may exceed the estimates indicated.
- Note 23 You must procure and maintain, at your expense, insurance of the types and in the minimum amounts we specify, whether in the Brand Manual or otherwise in writing. This insurance must be with insurers having minimum ratings we specify, name as additional insureds the parties we specify, and carry the endorsements and notice requirements we specify, whether in the Brand Manual or otherwise in writing. Insurance premiums vary widely by reason of location,
size of hotel, number of employees, insurance carrier, your creditworthiness, market conditions, and type of coverage purchased and are difficult to estimate. The low end of the estimate for a conversion assumes you already have most of the specified minimum insurance. For Sonesta Select-branded hotels located in Florida, we estimate the high end of the estimate to be $71,900 for conversions and $236,700 for new constructions. For Sonesta Essential-branded hotels located in Florida, we estimate the high end of the estimate to be $34,750 for conversions and $136,450 for new c
Source: Item 7 — ESTIMATED INITIAL INVESTMENT SONESTA SELECT (Note 1) – 125 ROOMS (FDD pages 36–46)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, franchisees must secure and maintain insurance. The insurance must be with insurers having minimum ratings specified by Sonesta Select Sonesta Essential, name as additional insureds the parties they specify, and carry the endorsements and notice requirements they specify, whether in the Brand Manual or otherwise in writing. The FDD does not specify to whom the insurance costs are paid.
Insurance premiums for Sonesta Select Sonesta Essential hotels can vary significantly based on factors such as location, hotel size, number of employees, the insurance carrier, creditworthiness, market conditions, and the type of coverage purchased. For Sonesta Select-branded hotels located in Florida, the high end of the estimate is $71,900 for conversions and $236,700 for new constructions. For Sonesta Essential-branded hotels located in Florida, the high end of the estimate is $34,750 for conversions and $136,450 for new constructions, due to higher local costs and expenses in that state.
Given the variability in insurance costs and the absence of a specified payee in the FDD, it is essential that prospective Sonesta Select Sonesta Essential franchisees carefully review the insurance requirements outlined in the Brand Manual and consult with qualified insurance brokers to obtain accurate quotes. Understanding these costs is crucial for budgeting and financial planning during the initial investment phase.