What does the PIP Fee cover for a Sonesta Select Sonesta Essential franchise?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
tion fee for certain Sonesta Essential-branded hotels.
If you are converting an existing hotel into a Brand Hotel, prior to the execution of the Franchise Agreement, you must pay us up to $5,000 ("PIP Fee") to cover our costs to perform an initial inspection of your property, prepare a property improvement plan ("PIP"), and verify completion of the PIP. The PIP will set forth a list of property improvements that you must make to convert your property to a Brand Hotel under the Brand Standards. The PIP Fee is nonrefundable. If we are required to reinspect your Hotel to ensure you have complied with the PIP, you must pay us a PIP reinspection fee of up to $5,000. The
Source: Item 5 — INITIAL FEES (FDD pages 23–24)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, the PIP Fee covers the costs associated with converting an existing hotel into a Sonesta Select or Sonesta Essential branded hotel. Specifically, this fee, which can be up to $5,000, covers Sonesta Select Sonesta Essential's expenses for an initial inspection of the property, the preparation of a Property Improvement Plan (PIP), and the verification of the PIP's completion. The PIP itself outlines the property improvements that the franchisee must undertake to meet Sonesta Select Sonesta Essential's brand standards.
This fee is non-refundable, regardless of whether the franchisee proceeds with the conversion after the inspection and PIP are prepared. Furthermore, if a reinspection of the hotel is required to ensure compliance with the PIP, the franchisee must pay an additional PIP reinspection fee of up to $5,000, which is also non-refundable. These fees are due when billed.
For a prospective Sonesta Select Sonesta Essential franchisee converting an existing hotel, it's crucial to factor in this potential $5,000 PIP Fee (and potentially another $5,000 for reinspection) into their initial investment costs. Understanding the scope of the required property improvements outlined in the PIP is essential for budgeting and assessing the feasibility of the conversion project. Franchisees should inquire about the typical range of PIP-related costs for similar properties to better prepare for this expense.