What is the Opening Date rescheduling fee for Sonesta Select Sonesta Essential, and what is the maximum amount?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
ee has been paid in full and you pay other amounts then due to us and our affiliates; and
- (8) you provide us with all requested documentation, including but not limited to certificates for all required insurance policies.
You agree to open your Hotel for business by the date set forth on Exhibit A (the "Opening Date") unless we otherwise agree in writing. If you are acquiring an existing Brand Hotel, the Opening Date will be the date you close on the acquisition of the existing Brand Hot
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, if a franchisee fails to open their hotel by the date specified in Exhibit A, they will be required to pay a fee. This fee is considered damages for the failure to open on time and is not a penalty. The amount of this rescheduling fee is Sonesta Select Sonesta Essential's then-current fee, which is currently up to $5,000.
This fee is significant for prospective franchisees as it highlights the importance of adhering to the agreed-upon opening date. Delays can result in unexpected costs, impacting the franchisee's initial investment and projected profitability. The fact that the fee is 'up to' $5,000 suggests that the exact amount may depend on the specific circumstances of the delay, but franchisees should budget for the maximum amount to be conservative.
It's important to note that the FDD specifies that this fee is 'not a penalty' but rather 'damages'. This distinction is important because penalties may be subject to legal challenges, whereas damages are intended to compensate the franchisor for losses incurred due to the delayed opening. Franchisees should carefully review Exhibit A of the Franchise Agreement to understand the specific opening date and any conditions that could affect it. They should also communicate proactively with Sonesta Select Sonesta Essential if they anticipate any delays to mitigate potential financial repercussions.