Does Sonesta Select Sonesta Essential have the right to withhold approval or consent, and under what conditions?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
full compliance with all applicable laws, rules and regulations and all applicable Brand Standards.
- D. Management of Your Hotel. Your Hotel will be managed only by you (or your Principal if you are an Entity) or a management company selected by you and approved by us (the "Management Company"). Any lease, management agreement, or other arrangement for operating your Hotel or any part thereof shall be subject to our prior written consent, which may be withheld in our sole discretion. If your Hotel will be managed by a Management Company, the Management Company will sign the Management Company Joinder to this Agreement. By doing so, the Management Company agrees that it is bound by all of the terms of this Agreement as if it were you under this Agreement and agrees that it is jointly and severally liable with you for all your obligations under this Agreement, except with respect to the actual payments of any amounts due to any third parties, our affiliates or pursuant to this Agreement. You must obtain our prior written consent to any change of the Management Company or if you wish to engage a Management Company after the Effective Date, which consent may be withheld in our sole discretion, and will be subject to the proposed Management Company demonstrating the capability to manage your Hotel pursuant to this Agreement and the Brand Standards. In the event we approve a change in the Management Company, the new Management Company must execute the Management Company Joinder to this Agreement.
You are solely responsible for the management, direction, and control of your Hotel, regardless of whether you retain a Management Company. We reserve the right to revoke our approval of the
Management Company if, in our discretion, the Management Company fails to remain qualified to manage your Hotel. The management agreement between you and the Management Company shall be subject and subordinate to this Agreement and, in the event of any conflict between the management agreement and this Agreement, the controlling contract shall be this Agreement.
E. Approved Products, Services, and Suppliers. We and our affiliates reserve the right to periodically designate and approve standards and specifications of the FF&E and the products and services that we periodically authorize for use at your Hotel. We and our affiliates also reserve the right to designate and may approve, from time to time, manufacturers, vendors, distributors, suppliers, and producers (collectively referred to herein as "vendors"), terms, and distribution methods for any goods or services (which include, but are not limited to, services, insurance, products, equipment, supplies, and materials). You shall purchase all goods and services required for the operation of your Hotel in accordance with the standards and specifications we periodically set, and from approved or designated vendors if we have specified approved or designated vendors for a particular good or service (which we may concentrate purchases with one or more vendors to obtain lower prices, better advertising support, and/or better services for any group of franchisees for any given good or service, which may be us or an affiliate) under terms, in the manner, and from the source designated by us or any of our affiliates. You may be required to sign such approved or designated vendors' form agreements for the purchase of such products and services. We may, at our option, arrange with approved vendors to collect or have our affiliates collect fees and expenses associated with goods and services they provide to you and, in turn, pay the vendor on your behalf for such goods or services.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, the brand retains the right to withhold approval or consent in several key areas related to the operation of a franchised hotel. Specifically, Sonesta Select Sonesta Essential requires prior written consent for any lease, management agreement, or other arrangement for operating the hotel, and this consent may be withheld at their sole discretion. This gives Sonesta Select Sonesta Essential significant control over how the hotel is managed and operated.
Furthermore, if a franchisee intends to use a management company, Sonesta Select Sonesta Essential's approval is required for both the initial selection and any subsequent changes to the management company. This consent can be withheld at Sonesta Select Sonesta Essential's sole discretion, and any new management company must demonstrate the capability to manage the hotel according to the brand's standards. Even with an approved management company, the franchisee remains responsible for the hotel's management, direction, and control, and Sonesta Select Sonesta Essential can revoke approval if the management company fails to remain qualified. The management agreement itself is subordinate to the franchise agreement, ensuring that Sonesta Select Sonesta Essential's standards take precedence.
Sonesta Select Sonesta Essential also maintains control over the vendors and suppliers that franchisees use. If a franchisee wants to purchase equipment, products, services, supplies, or materials from vendors not already approved, they must seek written approval from Sonesta Select Sonesta Essential. This approval can be conditioned on various requirements, such as delivery frequency, service standards, insurance coverage, indemnity and confidentiality agreements, and even license fees if the brand's marks are used. Sonesta Select Sonesta Essential can withhold or revoke approval of a good, service, or vendor at any time, requiring the franchisee to discontinue using the disapproved item or vendor immediately upon written notice. This comprehensive control ensures brand consistency and quality across all franchised locations.
These stipulations are typical in franchising, as they allow the franchisor to maintain brand standards and protect the overall system. However, prospective franchisees should carefully consider these conditions and understand that they will need to obtain Sonesta Select Sonesta Essential's approval for various aspects of their hotel's operation, including management agreements and vendor selections. This could potentially limit their flexibility in choosing suppliers or making operational decisions.