Does the Rider to the Sonesta Select Sonesta Essential franchise agreement prohibit any actions by the franchisee?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
-
- Confidentiality of this Agreement. The Franchisee Parties agree that the existence of this Agreement and its terms are strictly confidential and that, therefore, the Franchisee Parties and the other Releasing Parties shall not provide or disclose to any third party, unless authorized in writing to do so by us or properly directed or ordered to do so by public authority, any information regarding the existence of this Agreement, the terms or conditions contained in this Agreement, or any dealings or negotiations with us or any of the Released Parties related to this Agreement.
-
- Non-Disparagement. Franchisee Parties agree not to disparage or otherwise speak or write negatively, directly or indirectly, of us or any of the Released Parties, the Sonesta Select Hotels brand, the Sonesta Essential Hotels brand, the Sonesta Select Hotels franchise system, the Sonesta Essential Hotels franchise system, or any other service-marked or trademarked concept of ours or of any Released Party, or which would subject the Sonesta Select Hotels brand or the Sonesta Essential Hotels brand to ridicule, scandal, reproach, scorn, or indignity or which would negatively impact our goodwill or that of the Sonesta Select Hotels brand or the Sonesta Essential Hotels brand.
Source: Item 23 — RECEIPTS (FDD pages 84–261)
What This Means (2025 FDD)
According to the 2025 Sonesta Select Sonesta Essential Franchise Disclosure Document, the Rider to the franchise agreement includes certain prohibitions and restrictions on the franchisee's actions. Specifically, the franchisee is restricted from disclosing the terms of the franchise agreement to any third party unless authorized in writing by Sonesta Select Sonesta Essential or legally compelled by a public authority. This confidentiality clause ensures that the sensitive business information remains protected.
Additionally, the Rider contains a non-disparagement clause, which prevents franchisees from making negative statements about Sonesta Select Sonesta Essential, its brands (Sonesta Select Hotels and Sonesta Essential Hotels), or any related services or trademarks. This prohibition extends to any communication that could subject the brands to ridicule, scandal, or negatively impact their goodwill. This clause aims to protect the reputation and public image of the franchise system.
For prospective franchisees, these restrictions mean they must maintain strict confidentiality regarding the franchise agreement's details and refrain from any form of disparagement. Violation of these clauses could lead to legal repercussions or termination of the franchise agreement. Franchisees should carefully consider these limitations and ensure they are comfortable adhering to them before entering into the franchise agreement.