Is there a limit to how much the Taxes can vary for a Sonesta Select Sonesta Essential franchise?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS (Note 1) |
|---|---|---|---|
| Taxes | Varies | Upon demand | If any sales, use, gross receipts, or similar tax is imposed on us for the receipt of any payments you are required to make to us under the Franchise Agreement, then you also must pay this tax to us. |
Source: Item 6 — OTHER FEES (FDD pages 24–36)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, the amount of taxes a franchisee might pay varies. The FDD specifies that if any sales, use, gross receipts, or similar tax is imposed on Sonesta Select Sonesta Essential for the receipt of any payments a franchisee is required to make under the Franchise Agreement, then the franchisee must also pay this tax to Sonesta Select Sonesta Essential. The amount of these taxes is not fixed and will depend on the applicable tax laws and the amount of payments the franchisee makes to Sonesta Select Sonesta Essential that are subject to tax.
This means that a Sonesta Select Sonesta Essential franchisee's tax obligations to the franchisor will fluctuate based on factors outside of either party's direct control, such as changes in tax laws or the volume of taxable transactions. The tax amount is not capped or limited to a specific percentage or dollar figure within the franchise agreement, making it difficult to predict the exact tax burden.
Prospective franchisees should consider this variability when budgeting for their franchise. It would be prudent to consult with a financial advisor or tax professional to understand the potential tax implications in their specific location and business circumstances. Franchisees should also maintain open communication with Sonesta Select Sonesta Essential to stay informed about any changes in tax policies that may affect their obligations.