What does the Insurance fee for Sonesta Select Sonesta Essential cover?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
penses if training is conducted virtually. See Note 9. |
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS (Note 1) |
|---|---|---|---|
| Non Compliance Fee | 1% of Gross Rooms Revenue per month of non-compliance | Upon demand | If we deliver you notice of your breach under the Franchise Agreement, you may be assessed a non-compliance fee until such default has been remediated or cured. |
| Late Payment Charge | Lesser of 1.5% per month or the maximum rate permitted by applicable law | Upon demand | You may be assessed a late payment charge if you do not make any payment when due. Our acceptance of your payment of any deficiency will not waive our right to terminate the Franchise Agreement under its terms. |
| Reactivation Fee | The lesser of 25% of past due balances or $2,000 | Prior to reactivation | If we have suspended your Hotel from the Reservation System because of a default under your Franchise Agreement, and you have cured the default, we may require you to pay this fee as a condition of reactivation. |
| Insurance | $500 per month, plus reimbursement for all premiums, costs, and expenses we incur | As billed | If you do not procure or maintain the required insurance or policy limits described in the Brand Manual, in addition to paying us a monthly fee, we may (but are not obligated to) procure and maintain insurance for you without first giving you notice, and you will be required to reimburse us. The monthly fee is subject to change. See Item 8 and Note 9. |
| Taxes | Varies | Upon demand | If any sales, use, gross receipts, or similar tax is imposed on us for the receipt of any payments you are required to make to us under the Franchise Agreement, then you also must pay this tax to us. |
| Indemnification | Varies | Case by case basis as incurred | You must reimburse us if we are held liable for claims arising from the development or operation of your Hotel, the business you conduct under the Franchise Agreement, any default under your Franchise Agreement, and/or your employment practices or that are instituted by your employees, including attorneys' fees and court costs we reasonably incur to protect us, our parent, subsidi |
Source: Item 6 — OTHER FEES (FDD pages 24–36)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, the insurance fee is $500 per month, plus reimbursement for all premiums, costs, and expenses the franchisor incurs. This fee is charged if the franchisee does not procure or maintain the required insurance or policy limits described in the Brand Manual.
In the event that a Sonesta Select Sonesta Essential franchisee fails to maintain the required insurance, the franchisor has the option, but not the obligation, to procure and maintain insurance on behalf of the franchisee without prior notice. If Sonesta Select Sonesta Essential exercises this option, the franchisee is responsible for reimbursing all associated premiums, costs, and expenses, in addition to the standard monthly fee. The monthly fee is subject to change, and further details regarding insurance requirements can be found in Item 8 and Note 9 of the FDD.
This arrangement means that franchisees must ensure they meet all insurance requirements outlined in the Brand Manual to avoid incurring additional costs. Failure to do so not only results in the $500 monthly fee but also exposes the franchisee to potentially higher costs if Sonesta Select Sonesta Essential opts to secure the insurance themselves. Franchisees should carefully review Item 8 and Note 9 to fully understand the insurance obligations and potential financial implications.