What is the maximum Brand Promotion Fee that Sonesta Select Sonesta Essential can charge?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
E. Brand Promotion Fee. You agree to pay, in the same manner as the Royalty, a brand promotion fee (the "Brand Promotion Fee").
Currently, the Brand Promotion Fee is 3.5% of your Hotel's Gross Rooms Revenue.
However, we have the right, at any time and on notice to you, to increase the Brand Promotion Fee, provided that the Brand Promotion Fee shall not exceed 4.5% of your Hotel's Gross Rooms Revenue.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to the 2025 FDD, Sonesta Select Sonesta Essential franchisees must pay a Brand Promotion Fee. Currently, this fee is 3.5% of the hotel's Gross Rooms Revenue. However, Sonesta Select Sonesta Essential retains the right to increase this fee at any time, provided they give notice to the franchisee.
The maximum Brand Promotion Fee that Sonesta Select Sonesta Essential can charge is capped at 4.5% of the hotel's Gross Rooms Revenue. This fee is paid in the same manner as the Royalty fees.
It's important for prospective franchisees to understand that while the current fee is 3.5%, it could increase to 4.5%. This increase would directly impact the franchisee's profitability, as it represents a larger percentage of their Gross Rooms Revenue being allocated to the Brand Promotion Fee. Franchisees should factor this potential increase into their financial projections and business planning.