What is the maximum Late Payment Charge for a Sonesta Select Sonesta Essential franchise?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS (Note 1) |
|---|---|---|---|
| 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. |
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, a franchisee may be assessed a late payment charge if they do not make payments when due. The late payment charge will be the lesser of 1.5% per month or the maximum rate permitted by applicable law. This charge is due upon demand.
This means that if a franchisee is late on a payment, Sonesta Select Sonesta Essential can charge them interest on the overdue amount. The exact amount will depend on the outstanding balance and the prevailing legal limits on interest rates in the franchisee's jurisdiction. For example, if the maximum rate permitted by law in a certain state is 1% per month, then Sonesta Select Sonesta Essential can only charge 1% per month on late payments in that state, even though their standard rate is 1.5%.
It is important to note that Sonesta Select Sonesta Essential's acceptance of a late payment does not waive their right to terminate the Franchise Agreement due to the payment deficiency. Franchisees should ensure timely payments to avoid late fees and potential termination of their franchise agreement.