Does Sonesta Select Sonesta Essential require the franchisee to notify them of any potential Events of Default?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) An "Event of Default" will occur if you fail to satisfy or comply with any of the obligations, requirements, conditions, or terms set forth in (i) this Agreement, the Brand Standards (including the minimum performance scores required by the Brand Manual), or any attachment to this Agreement; or (ii) any other agreement you have with us, or an Entity, relating to your Hotel, including, any computer system agreement, or any agreement to manage your Hotel.
An "Event of Default" will also occur if you make any misrepresentations to us, whether in entering into this Agreement, or in the performance of your obligations to us.
(2) Our notice of termination will not relieve you of your obligations under this Agreement or any of its attachments.
(3) Upon notice of an Event of Default, we also may at any time, at our sole discretion, suspend our obligations under this Agreement (including Central Reservation Services as more fully described below) and may remove the listing of your Hotel from any directories we publish, and from any advertising we publish, or to remove or suspend you from the Central Reservation System immediately without notice to you, and/or rescind any terms to this Agreement that were negotiated between the parties.
We will have the right to divert reservations previously made for your Hotel to other Network Hotels after giving you notice of an Event of Default.
If you fully cure the Event of Default within the time provided in our notice, including payment of any amounts accruing to us under this Agreement after the date of our notice, and further including payment of our then applicable administrative fee for resumption of services, we will restore you to the Central Reservation System, and add you to all future directories we publish and to all advertising we subsequently disseminate (except advertising that was ordered before your reinstatement), but we will not be required to redirect to you any reservations previously made for your Hotel and diverted to other Network Hotels during the period of suspension or removal, and you will be entitled to no compensation in connection with our election to suspend or remove your Hotel from our directories, advertising or the Central Reservation System.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, Sonesta Select Sonesta Essential does not explicitly require the franchisee to notify them of any potential Events of Default. However, the document states that Sonesta Select Sonesta Essential will furnish a notice of default to the franchisee based on the Event of Default. The franchisee then has 30 days to cure the default after receiving such notice.
If the Event of Default is non-monetary and cannot be cured within 30 days, the franchisee must diligently pursue curing the default within the additional time periods set forth by Sonesta Select Sonesta Essential in the notice of default. Failure to cure the default within the specified time frame can lead to termination of the franchise agreement.
Upon notice of an Event of Default, Sonesta Select Sonesta Essential has the right to suspend their obligations under the agreement, including Central Reservation Services, and may remove the hotel's listing from directories and advertising. They can also divert reservations to other Network Hotels after giving notice of the Event of Default. If the franchisee cures the default within the given time, Sonesta Select Sonesta Essential will restore services, but they are not required to redirect previously diverted reservations back to the franchisee's hotel.