Does the release agreement for Sonesta Select Sonesta Essential cover unknown claims?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
If the Hotel is located in California or if any of the Franchisee Parties are residents of California, the following shall apply:
Section 1542 Acknowledgment. It is the Franchisee Parties' intention, on their own behalf and on behalf of the Releasing Parties, in executing this release that this Section be and is a general release which shall be effective as a bar to each and every claim, demand, or cause of action released by the Franchisee Parties or the Releasing Parties. The Franchisee Parties recognize that they or the Releasing Parties may have some claim, demand, or cause of action against the Released Parties of which he, she, or it is totally unaware and unsuspecting, which he, she, or it is giving up by executing this release. It is the Franchisee Parties' intention, on their own behalf and on behalf of the Releasing Parties, in executing this instrument that it will deprive him, her, or it of
each such claim, demand, or cause of action and prevent him, her, or it from asserting it against the Released Parties. In furtherance of this intention, the Franchisee Parties, on their own behalf and on behalf of the Releasing Parties, expressly waive any rights or benefits conferred by the provisions of Section 1542 of the California Civil Code, which provides as follows:
"A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party."
The Franchisee Parties acknowledge and represent that they have consulted with legal counsel before executing this release and that they understand its meaning, including the effect of Section 1542 of the California Civil Code, and expressly consent that this release shall be given full force and effect according to each and all of its express terms and provisions, including, without limitation, those relating to the release of unknown and unsuspected claims, demands, and causes of action.
If the Hotel is located in Maryland or if any Franchisee Party is a resident of Maryland, the following shall apply:
Any general release provided for hereunder shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
Source: Item 23 — RECEIPTS (FDD pages 84–261)
What This Means (2025 FDD)
According to the 2025 FDD, the release agreement for Sonesta Select Sonesta Essential includes clauses that address the waiver of unknown claims, particularly for franchisees in California. The standard release requires franchisees to release Sonesta RL Parties from all claims, both known and unknown. This means that by signing the release, franchisees are giving up their right to sue Sonesta Select Sonesta Essential for any claims they may not even be aware of at the time of signing.
For franchisees in California, the FDD includes a specific acknowledgment of Section 1542 of the California Civil Code, which states that a general release does not cover claims the releasing party doesn't know or suspect to exist. However, the Sonesta Select Sonesta Essential agreement requires franchisees to expressly waive the protections of Section 1542, indicating their intent to release all claims, including those that are unknown. This waiver is only enforced if the franchisee acknowledges they have consulted with legal counsel and understand the implications of waiving this right.
For franchisees in Maryland, the FDD states that any general release will not apply to any liability under the Maryland Franchise Registration and Disclosure Law. This means that even if a franchisee signs a general release, they still retain the right to bring claims against Sonesta Select Sonesta Essential under Maryland franchise law. This provision provides additional protection to franchisees in Maryland, ensuring they do not inadvertently waive their rights under state franchise laws. Prospective franchisees should carefully review these provisions with legal counsel to fully understand their rights and obligations when signing a release agreement with Sonesta Select Sonesta Essential.