Is the PIP fee applicable to new construction Sonesta Select Sonesta Essential franchises?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
SELECT (Note 1) – 125 ROOMS**
| Type Of Expenditure | Amount Conversion | New Construction | Method of Payment | When Due | To Whom Payment Is To Be Made |
|---|---|---|---|---|---|
| Initial Fee (Note 2) | $65,000 | $65,000 | Lump sum | Upon your signing of the Franchise Agreement | Us |
| Onboarding | $5,000 | $5,000 | Lump sum | As arranged | Us |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT SONESTA SELECT (Note 1) – 125 ROOMS (FDD pages 36–46)
What This Means (2025 FDD)
According to the 2025 FDD, the PIP fee is not applicable to new construction Sonesta Select Sonesta Essential franchises. The initial investment table for a 125-room Sonesta Select indicates that the PIP fee is $5,000 for conversions, but is listed as 'N/A' for new construction.
The PIP, or Property Improvement Plan, is typically associated with converting an existing hotel to meet the brand standards of Sonesta Select Sonesta Essential. The PIP fee covers the cost of preparing or verifying completion of the PIP. A reinspection fee, ranging from $0 to $5,000, may be charged if a hotel fails the initial PIP inspection during a conversion.
For prospective franchisees, this means that if you are building a new Sonesta Select Sonesta Essential hotel, you will not have to pay the $5,000 PIP fee. However, this does not mean there will be no inspections or compliance requirements. New constructions will still need to adhere to brand standards, but the costs associated with ensuring compliance are accounted for in other areas of the initial investment, such as construction and design review, construction and improvement costs, and furniture, fixtures, and equipment.