Does Sonesta Select Sonesta Essential receive consideration for placing the Incentive Note with a lender?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
It is not our practice or intent to sell, assign or discount to a third party all or part of the Incentive Note, nor do we receive any consideration for placing the Incentive Note with a lender.
Source: Item 10 — FINANCING (FDD pages 51–52)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, Sonesta Select Sonesta Essential does not receive any consideration for placing the Incentive Note with a lender. The Incentive Note is a promissory note that franchisees sign when they sign the Franchise Agreement to receive an incentive from Sonesta Select Sonesta Essential to assist with the development or conversion of their hotel.
The document specifies that it is not Sonesta Select Sonesta Essential's practice or intent to sell, assign, or discount the Incentive Note to a third party. This means that Sonesta Select Sonesta Essential typically holds the note themselves rather than selling it to a financial institution.
This arrangement benefits franchisees because it means they are dealing directly with Sonesta Select Sonesta Essential regarding the Incentive Note, rather than a third-party lender. It also indicates that Sonesta Select Sonesta Essential is not profiting from the placement of the note with another lender.