What is the purpose of the New Construction Rider for a Sonesta Select Sonesta Essential franchise?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
nversion Rider**
| THIS RIDER (the "Rider") is entered into and made effective as of the Effective Date of the | |
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| Franchise Agreement in accordance with the terms of the Franchise Agreement signed concurrently | |
| herewith ("Franchise Agreement") by and between SONESTA RL HOTELS FRANCHISING INC ("we," | |
| "us," or "our"), and | ("you" or "your"). |
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- Background. This Rider is annexed to and forms part of the Franchise Agreement. This Rider is being signed because you are converting an existing hotel into a Brand Hotel, pursuant to the Franchise Agreement. Capitalized terms used, but not defined, herein shall have the meanings given them in the Franchise Agreement.
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- Interest in Premises. You must deliver to us, prior to the Opening Date, and in any event no later than thirty (30) days after the Effective Date, either a deed reflecting your ownership of the Premises (the "Deed") or a copy of your lease for the Premises that allows you the right to enter into the Franchise Agreement (the "Lease"). If you fail to timely provide us the Deed or Lease, we may immediately terminate the Franchise Agreement. You represent and warrant that, throughout the Term of the Franchise Agreement, you will be entitled to possession of the Premises and your Hotel without restrictions that would interfere with your performance under the Franchise Agreement, subject to the reasonable requirements of any financing secured by your Hotel. You will provide us copies of all documentation reflecting your right to possession of the Premises at any time upon our request. Further, if you do not own the Premises, you must provide us with copies of any amendment, addendum, extension, or other modification to the Lease within five days following execution.
You acknowledge and agree that any of our involvement in the approval of location is for our sole benefit. You further acknowledge that you have been advised to obtain the advice of your own professional advisors in connection with your purchase of the Premises or the Lease, as applicable.
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- Property Improvement Plan. You or your Principal and the Management Company, if applicable as provided under Section 8.D, will meet with us to conduct an initial inspection of the Premises and develop a property improvement plan (the "PIP") of improvements required to meet Brand Standards. We may assign you a project manager or onboarding specialist. The PIP is attached as Exhibit D-1(A) to the Franchise Agreement and is incorporated herein by reference.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, the New Construction Rider is an annex to the Franchise Agreement that is signed when a franchisee is constructing a new Brand Hotel. The rider ensures that the franchisee delivers either a deed reflecting ownership of the premises or a copy of the lease no later than 30 days after the effective date of the agreement. Failure to provide the deed or lease can result in immediate termination of the Franchise Agreement.
The New Construction Rider also stipulates that the franchisee must have the right to possess the premises without restrictions that would interfere with their performance under the Franchise Agreement. The franchisee must provide copies of any amendments or modifications to the lease within five days of execution. Sonesta Select Sonesta Essential's involvement in location approval is solely for their benefit, and franchisees are advised to seek professional advice regarding the purchase or lease of the premises.
Furthermore, the franchisee is expected to continue construction work uninterrupted until completion, except for events beyond their control, such as strikes, epidemics, natural disasters, or governmental actions. These events, however, do not include financial inability or difficulty in obtaining permits. The construction must be completed, and the hotel must comply with the Franchise Agreement and Brand Standards by the date specified by Sonesta Select Sonesta Essential in writing. Franchisees must notify Sonesta Select Sonesta Essential upon completion of construction, and Sonesta Select Sonesta Essential has the sole right to determine whether the construction work meets the required standards.