What is the 'Management Company Joinder' for a Sonesta Select Sonesta Essential franchise, and when is it required?

According to the 2025 Franchise Disclosure Document, the Management Company Joinder outlines the responsibilities of the Management Company in relation to the franchisee's obligations under the Franchise Agreement with Sonesta Select Sonesta Essential. The Management Company agrees to be jointly and severally liable with the franchisee for the timely and complete performance of all the franchisee's obligations under the agreement. This includes ensuring that the franchisee fulfills their duties as outlined in the Franchise Agreement.

However, the Management Company's liability has some limitations. While it is responsible for ensuring that the franchisee makes payments to third parties, Sonesta Select Sonesta Essential affiliates, or Sonesta Select Sonesta Essential itself, it is not directly liable for the actual payment of these amounts. The Management Company is bound by all the terms of the Franchise Agreement as if it were the franchisee. This ensures that Sonesta Select Sonesta Essential has recourse to the Management Company to enforce the franchisee's obligations.

The Management Company Joinder is required as part of the Franchise Agreement. It is executed when the Franchise Agreement is signed, making the Management Company's obligations effective from the same date as the Franchise Agreement. This arrangement provides Sonesta Select Sonesta Essential with an additional layer of security, ensuring that a responsible entity is committed to overseeing the franchisee's performance and adherence to the terms of the agreement. This is a fairly common practice in franchising, particularly when the franchisee is a special purpose entity or lacks substantial operating history.