What is the minimum amount for the Reactivation Fee for Sonesta Select Sonesta Essential?
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, subsidiaries, or affiliates. |
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS (Note 1) |
| --------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Transfer Fee | The Initial Fee | Upon or before execution of the Franchise Agreement by transferee | If there is a proposed transfer and the proposed transferee desires to continue to operate your Hotel as a Brand Hotel, the proposed transferee must submit an application for a new franchise agreement. You or the transferee will pay the transfer fee. No transfer fee will be due if the transfer is to a spouse following the spouse's death. |
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 Reactivation Fee is the lesser of 25% of past due balances or $2,000. This fee is required if Sonesta Select Sonesta Essential has suspended a hotel from the Reservation System due to a default under the Franchise Agreement.
In practical terms, if a franchisee's hotel is suspended from the reservation system due to a breach of the agreement, they will have to pay a Reactivation Fee to be reinstated. The fee is calculated as the lesser of 25% of the outstanding balance or a flat $2,000. For example, if the past due balance is $5,000, the reactivation fee would be $1,250 (25% of $5,000). However, if the past due balance is $10,000, the reactivation fee would be $2,000, as it is the lesser amount.
This fee is due prior to reactivation, meaning the franchisee must pay it before their hotel can be reinstated in the reservation system. This policy ensures that Sonesta Select Sonesta Essential is compensated for the disruption and administrative costs associated with the suspension and reactivation process. It also incentivizes franchisees to maintain compliance with the Franchise Agreement to avoid suspension and the associated fees.