Does the Rider to the Sonesta Select Sonesta Essential franchise agreement change any obligations of the franchisee?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
- REPRESENTATIONS AND WARRANTIES: FURTHER ASSURANCES. The following is added to the end of Section 1.D of the Franchise Agreement:
The acknowledgements or representations of the franchisee made in this Agreement which disclaim the occurrence and/or acknowledge the non-occurrence of acts that could constitute a violation of the Franchise Law are not intended to nor shall they act as a release, estoppel or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law.
- RELEASES. The following is added to the end of Sections 12.C(11) and 13.C of the Franchise Agreement:
Pursuant to COMAR 02.02.08.16L, any release required as a condition of renewal and/or assignment/transfer will not apply to claims arising under the Maryland Franchise Registration and Disclosure Law.
Notwithstanding the foregoing, Minn. Stat. Sec 80C.21 and Minn. Rule 2860.4400J prohibit us, except in certain specified cases, from requiring litigation to be conducted outside Minnesota.
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- WAIVER OF PUNITIVE DAMAGES, JURY TRIAL, AND CLASS ACTION BAR. If and then only to the extent required by the Minnesota Franchises Law, Section 17.I of the Franchise Agreement is deleted.
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- INJUNCTIVE RELIEF. Section 17.J of the Franchise Agreement is deleted and replaced with the following:
- J. Injunctive Relief. Nothing in this Agreement, including the provisions of Section 17.F, bars our right to seek specific performance of the provisions of this Agreement and injunctive relief against threatened or actual conduct that will cause us, the Marks and/or the Franchise System loss or damage, under customary equity rules, including applicable rules for obtaining restraining orders and temporary or preliminary injunctions (subject to our obligation to arbitrate the underlying claim if required by Section 17.F). You agree that we may seek such injunctive relief in addition to such further or other relief as may be available at law or in equity. You agree that your only remedy if an injunction is entered against you will be the dissolution of that injunction, if warranted, upon due hearing (all claims for damages by injunction being expressly waived hereby). RCW 49.62.060 prohibits a franchisor from restricting, restraining, or prohibiting a franchisee from (i) soliciting or hiring any employee of a franchisee of the same franchisor or (ii) soliciting or hiring any employee of the franchisor. As a result, any such provisions contained in the franchise agreement or elsewhere are void and unenforceable in Washington.
Any provision in the franchise agreement or related agreements that prohibits the franchisee from communicating with or complaining to regulators is inconsistent with the express instructions in the Franchise Disclosure Document and is unlawful under RCW 19.100.180(2)(h).
Source: Item 23 — RECEIPTS (FDD pages 84–261)
What This Means (2025 FDD)
According to the 2025 FDD, the Rider to the Sonesta Select Sonesta Essential franchise agreement does modify the obligations of the franchisee, with changes varying based on the franchisee's location. For franchisees in specific states like Maryland, Minnesota, Virginia, Illinois, and Washington, the rider includes state-specific provisions that amend the standard franchise agreement. These riders address aspects such as compliance with state franchise laws, dispute resolution, and waivers. For instance, the Maryland rider clarifies that acknowledgments or representations made by the franchisee do not act as a release, estoppel, or waiver of liability under Maryland franchise law. Similarly, releases required for renewal or assignment do not apply to claims arising under Maryland franchise law. These stipulations ensure that franchisees retain their rights and protections under state laws, regardless of any conflicting terms in the standard franchise agreement. The Rider to the Sonesta RL Hotels Franchising Inc. Franchise Agreement for use in Washington also states that any provisions in the franchise agreement that prohibits the franchisee from communicating with or complaining to regulators is inconsistent with the express instructions in the Franchise Disclosure Document and is unlawful under RCW 19.100.180(2)(h). RCW 49.62.060 prohibits a franchisor from restricting, restraining, or prohibiting a franchisee from (i) soliciting or hiring any employee of a franchisee of the same franchisor or (ii) soliciting or hiring any employee of the franchisor. As a result, any such provisions contained in the franchise agreement or elsewhere are void and unenforceable in Washington.
For franchisees in Minnesota and North Dakota, the rider modifies the franchise agreement regarding litigation and injunctive relief. Specifically, the Minnesota rider states that the franchisor cannot require litigation to be conducted outside Minnesota, except in certain specified cases, and it modifies sections related to waivers, punitive damages, jury trials, and class action bars to comply with Minnesota law. The rider also adjusts the franchisor's right to seek injunctive relief, ensuring it aligns with customary equity rules and the franchisee's right to dissolve an injunction if warranted. These modifications ensure that the legal processes and remedies available to both the franchisor and franchisee are fair and compliant with Minnesota state law.
In essence, the riders serve to tailor the franchise agreement to comply with specific state laws, providing additional protections and clarifying obligations for franchisees in those states. Prospective franchisees should carefully review the rider applicable to their state to understand how it modifies the standard franchise agreement and what additional rights and obligations they may have. This ensures that franchisees are fully aware of their legal standing and the specific requirements of operating a Sonesta Select Sonesta Essential franchise in their state.