What is the prohibited action for a Sonesta Select Sonesta Essential franchisee that can lead to an Event of Default?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
However, you will not open your Hotel unless and until you receive our written authorization to do so.
We will only authorize your Hotel to open when we, at our sole discretion, are satisfied that you have complied with all the terms and conditions set forth in the Franchise Agreement, including but not limited to Section 2.E, and this Rider.
Opening your Hotel before we authorize you to open will constitute unauthorized use of the Marks and a material breach of the Franchise Agreement.
If you open your Hotel prior to our authorization, you agree to pay to us damages as set forth in Section 14.G(3) of the Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, an Event of Default for a Sonesta Select Sonesta Essential franchisee can occur if the franchisee opens their hotel before receiving written authorization from Sonesta Select Sonesta Essential. This is considered a material breach of the Franchise Agreement and unauthorized use of the Marks.
Sonesta Select Sonesta Essential requires franchisees to obtain written authorization before opening their hotel. This authorization is granted only when Sonesta Select Sonesta Essential is satisfied that the franchisee has complied with all the terms and conditions outlined in the Franchise Agreement. These terms and conditions include those listed in Section 2.E of the agreement and any additional requirements specified in the Rider.
If a franchisee opens their Sonesta Select Sonesta Essential hotel without prior authorization, they agree to pay damages as specified in Section 14.G(3) of the Franchise Agreement. Additionally, opening without authorization constitutes unauthorized use of the Marks, which can lead to further penalties and legal consequences as outlined in the agreement.