Are there any other fees that Sonesta Select Sonesta Essential may require me to pay?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
uest Room rebates and overcharges; gratuities to employees or service charges levied in lieu of such gratuities, which are payable to employees; and applicable federal, state and local sales, occupancy and use taxes collected from guests.
- E. Brand Promotion Fee. You agree to pay, in the same manner as the Royalty, a brand promotion fee (the "Brand Promotion Fee"). Currently, the Brand Promotion Fee is 3.5% of your Hotel's Gross Rooms Revenue. However, we have the right, at any time and on notice to you, to increase the Brand Promotion Fee, provided that the Brand Promotion Fee shall not exceed 4.5% of your Hotel's Gross Rooms Revenue.
- F. Third-Party Fees. We periodically may require you to pay us fees due from you to third parties, which we will collect on behalf of such third parties and remit to such third parties.
- G. Property Improvement Plans Fees. In connection with our inspections of your Hotel and issuance of any PIP, and if applicable, reinspection following a failed PIP inspection, you will pay us our then current PIP fee (currently, up to $5,000, subject to Fee Adjustments (as defined in Schedule 3.H)).
- H. Booking Fees and Commissions; Other Fees. You are responsible for the payment of all booking fees, reservation fees, and commissions incurred in connection with the operation of your Hotel, whether payable directly to a third-party or advanced by us to such third-party and billed to you. In addition, beginning on the Opening Date, you will pay to us for each month, or as otherwise billed, other fees resulting from the operation of your Hotel and the programs in which you are or will be required to participate as further described in the Brand Manual (such as technology fees and brand conference fees), which may change from time to time. A summary of the currently applicable booking fees, commissions, and other fees is set forth in Schedule 3.H. Such fees are subject to change.
You will pay to us such other fees designated in this Agreement, in the Brand Manual, or otherwise provided to you in writing, which may be made available to you electronically through the Franchise System's online franchisee portal. We have the right to rename certain programs, add or remove programs, and modify fees for various elements of the Franchise System and other services as described in the Brand
Manual, this Agreement or otherwise provided to you in writing, and upon 30 days' notice to you. If you request that we provide extraordinary services, such as amendments you request, amendments necessitated by your action or inaction, a lender comfort letter or other documentation outside the ordinary course of business, you must pay us an administrative fee for each such letter or document (currently $2,000 per lender comfort letter and up to $5,000 for other documentation, subject to Fee Adjustments), plus any additional costs we may incur in preparing or reviewing such documentation, including reasonable attorneys' fees.
- I. Interest on Late Payments. If any amount due from you hereunder is not paid when due, such non-payment will constitute a material breach of this Agreement. In addition, we may assess a late payment charge of 1.5% per month or the maximum amount permitted by applicable law, whichever is less, on the unpaid amount beginning on the first day following the due date. Should we engage legal counsel or other professionals in connection with any failure by you to pay when due any monies owed under this Agreement or submit when due any reports, information or supporting records, or in connection with any failure otherwise to comply with this Agreement, you will reimburse us on demand for all the above-listed costs and expenses we incur, whether 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 application to us before you enter into any agreement to add any Guest Rooms to your Hotel. As a condition to our granting approval of such application, we may require you to modernize, rehabilitate or upgrade your Hotel, subject to Section 8.G of this Agreement.
- K. Application of Payments. Despite any designation you make, we may apply any of your payments to any of your past due indebtedness to us. We may set off any amounts you or your owners owe us or our affiliates against any amounts we or our affiliates owe you or your owners.
- L. Method of Payment. You hereby authorize us to debit your checking, savings, or other account automatically for the Royalty, Brand Promotion Fee, and other amounts due to us or our affiliates (the "EFT Authorization"). You agree to sign and deliver to us any documents we require for such EFT Authorization. Such EFT Authorization shall remain in full force and effect during the Term. We will debit the account you designate for these amounts on their due dates (or the subsequent business day if the due date is a national holiday or a weekend day). You agree to ensure that funds are available in your designated account to cover our withdrawals. If we permit you to pay by any other means, we may require payment of our then-current alternative payment fee.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, franchisees may incur several other fees. These include a Brand Promotion Fee, currently at 3.5% of the hotel's Gross Rooms Revenue, but subject to increase up to 4.5%. Franchisees are also responsible for Third-Party Fees that Sonesta Select Sonesta Essential may collect and remit on behalf of third parties.
Property Improvement Plan (PIP) fees are also applicable in connection with hotel inspections and the issuance of any PIP, potentially reaching up to $5,000, subject to Fee Adjustments. Franchisees must also cover all booking fees, reservation fees, and commissions. Other fees resulting from the hotel's operation and required program participation, such as technology and brand conference fees, are also the franchisee's responsibility and are detailed in the Brand Manual.
Additionally, a loyalty program fee is charged for participation in the Sonesta Travel Pass program, amounting to 3% of the hotel's Qualified Revenue from participating guests, with the possibility of an increase up to 4.5%. Franchisees must also arrange and pay for professional photography sessions for their hotel, especially after significant renovations or improvements. Fees may also be incurred for specific support requests from IT and franchise services help desks, with the fee amount agreed upon before the support is initiated. If additional Guest Rooms are added after signing the agreement, a Room Addition Fee is required, which is the greater of $500 per additional Guest Room or $5,000.
Sonesta Select Sonesta Essential may also charge fees for additional or special guidance, assistance, or training requested by the franchisee, including personnel's per diem charges and travel and living expenses. Franchisees may also incur costs for additional training if the Hotel Representative does not feel sufficiently trained, as well as ongoing training fees for required training courses, which are currently $2,000 per day plus expenses for in-person training or $200 per hour for virtual training. Franchisees are also responsible for costs associated with attending the Brand Conference. Finally, franchisees are responsible for costs and expenses of any additional setup or third-party fees associated with the implementation of the Services.