What is the 'Management Company Joinder' in the Sonesta Select Sonesta Essential franchise agreement, and what does it entail?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
If your Hotel will be managed by a Management Company, the Management Company will sign the Management Company Joinder to this Agreement.
By doing so, the Management Company agrees that it is bound by all of the terms of this Agreement as if it were you under this Agreement and agrees that it is jointly and severally liable with you for all your obligations under this Agreement, except with respect to the actual payments of any amounts due to any third parties, our affiliates or pursuant to this Agreement.
You must obtain our prior written consent to any change of the Management Company or if you wish to engage a Management Company after the Effective Date, which consent may be withheld in our sole discretion, and will be subject to the proposed Management Company demonstrating the capability to manage your Hotel pursuant to this Agreement and the Brand Standards.
In the event we approve a change in the Management Company, the new Management Company must execute the Management Company Joinder to this Agreement.
You are solely responsible for the management, direction, and control of your Hotel, regardless of whether you retain a Management Company. We reserve the right to revoke our approval of the
Management Company if, in our discretion, the Management Company fails to remain qualified to manage your Hotel. The management agreement between you and the Management Company shall be subject and subordinate to this Agreement and, in the event of any conflict between the management agreement and this Agreement, the controlling contract shall be this Agreement.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, Sonesta Select Sonesta Essential requires a 'Management Company Joinder' if the franchisee chooses to have their hotel managed by a separate management company. This joinder is a legally binding agreement that essentially makes the management company jointly and severally liable with the franchisee for fulfilling the obligations outlined in the franchise agreement.
By signing the Management Company Joinder, the management company agrees to be bound by all the terms of the franchise agreement as if they were the franchisee. This means the management company is responsible for ensuring the franchisee meets all requirements and standards set forth by Sonesta Select Sonesta Essential. However, there is an exception: the management company is not directly responsible for the actual payment of any amounts due to third parties, Sonesta Select Sonesta Essential's affiliates, or Sonesta Select Sonesta Essential itself. Despite this exception, the management company is still obligated to ensure that these payments are made by the franchisee.
Sonesta Select Sonesta Essential maintains control over the selection and any changes to the management company. The franchisee must obtain prior written consent from Sonesta Select Sonesta Essential before engaging a management company or changing the existing one. This consent can be withheld at Sonesta Select Sonesta Essential's discretion. If a change is approved, the new management company must also execute the Management Company Joinder. Ultimately, the franchise agreement between the franchisee and Sonesta Select Sonesta Essential takes precedence over any agreement between the franchisee and the management company, ensuring Sonesta Select Sonesta Essential's standards are always upheld.