For Sonesta Select Sonesta Essential, what is the significance of the 'Opening Date' field in this section?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
ee has been paid in full and you pay other amounts then due to us and our affiliates; and
- (8) you provide us with all requested documentation, including but not limited to certificates for all required insurance policies.
You agree to open your Hotel for business by the date set forth on Exhibit A (the "Opening Date") unless we otherwise agree in writing. If you are acquiring an existing Brand Hotel, the Opening Date will be the date you close on the acquisition of the existing Brand Hot
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, the 'Opening Date,' as specified on Exhibit A of the Franchise Agreement, represents the date by which the franchisee is expected to open their hotel for business. If the franchisee is acquiring an existing Brand Hotel, the Opening Date is the date the acquisition closes. Failing to meet this deadline can result in financial penalties. Specifically, if the franchisee fails to open their hotel under the Marks by the Opening Date, they will be required to pay Sonesta Select Sonesta Essential a fee for failing to open on time. This fee is not a penalty, but damages, and is currently up to $5,000.
Prior to opening, Sonesta Select Sonesta Essential requires the franchisee to fulfill several conditions. These include receiving written notification that the hotel meets brand standards, obtaining all necessary licenses and permits, complying with training and brand introduction requirements (unless otherwise agreed in writing), hiring and training staff to protect the Marks, fulfilling all development obligations specified in Exhibit D-1 or D-2, installing the required Computer System, paying the Initial Fee and any other due amounts, and providing all requested documentation, including insurance certificates.
Sonesta Select Sonesta Essential also requires written authorization before the franchisee can open the hotel. This authorization is granted only when Sonesta Select Sonesta Essential is satisfied that all terms and conditions of the Franchise Agreement have been met. Opening the hotel without this authorization constitutes unauthorized use of the Marks and a material breach of the Franchise Agreement, potentially leading to further damages as outlined in Section 14.G(3) of the Franchise Agreement.
In cases involving renovation work, the franchisee must complete the renovations by the 'Renovation Work Completion Date' specified in the PIP (Property Improvement Plan). Similarly, for new construction, the hotel must be completed and opened within 18 months of breaking ground, and no later than 30 months from the Effective Date, unless otherwise specified in Exhibit A. Failure to meet these deadlines can result in default under Section 14.B.(2) of the Franchise Agreement.