How is the Non Compliance Fee calculated 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) |
|---|---|---|---|
| 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. |
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 Non-Compliance Fee may be assessed if a franchisee breaches the Franchise Agreement. This fee is calculated as 1% of the Gross Rooms Revenue per month of non-compliance. The fee is due upon demand from Sonesta Select Sonesta Essential and continues to accrue until the default is corrected or resolved.
This means that if a Sonesta Select Sonesta Essential franchisee fails to meet certain standards or violates the terms of the agreement, they will be charged 1% of their hotel's total revenue from room rentals for each month they remain in non-compliance. For example, if a hotel generates $100,000 in Gross Rooms Revenue in a month and is found to be in non-compliance, the franchisee would owe $1,000 for that month. This fee is in addition to any other remedies Sonesta Select Sonesta Essential may pursue under the Franchise Agreement.
The Non-Compliance Fee serves as a financial incentive for franchisees to adhere to the standards and requirements set forth by Sonesta Select Sonesta Essential. It is important for prospective franchisees to carefully review the Franchise Agreement to understand the specific obligations and potential consequences of non-compliance. Franchisees should also maintain open communication with Sonesta Select Sonesta Essential to address any concerns or issues promptly to avoid incurring these fees.