What is the Room Addition Fee for Sonesta Select Sonesta Essential, and how is it calculated?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
r or not a legal action or other proceeding is initiated. You acknowledge that this Section 3.I is not our agreement to accept any payments after they are due or our commitment to extend credit to, or otherwise finance your operation of, your Hotel.
- J. Room Addition Fee. If you add or construct additional Guest Rooms at your Hotel at any time after you sign this Agreement, you will pay us a nonrefundable fee equal to the greater of $500 per additional Guest Room or $5,000 (the "Room Addition Fee"). You must pay the Room Addition Fee to us when you submit an application for our approval to add any Guest Rooms to your Hotel, and you must submit that applicatio
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, if a franchisee adds or constructs additional guest rooms at their hotel after signing the Franchise Agreement, they must pay a Room Addition Fee. This fee is nonrefundable and is equal to the greater of $500 per additional guest room or $5,000.
This fee is due when the franchisee submits an application for approval to add guest rooms, and this application must be submitted before entering into any agreement to add rooms. Sonesta Select Sonesta Essential may also require the franchisee to modernize, rehabilitate, or upgrade the hotel as a condition of approving the application.
In practical terms, this means that a franchisee planning to expand their hotel should factor in this fee. For example, adding 5 guest rooms would incur a $5,000 fee (since 5 rooms x $500/room = $2,500, and the greater of $2,500 and $5,000 is $5,000). Adding 20 rooms would incur a $10,000 fee (20 rooms x $500/room = $10,000, which is greater than $5,000). Franchisees need to budget accordingly and be prepared for potential upgrade requirements to gain approval for expansion.