Is there a non-compliance charge for a Sonesta Select Sonesta Essential franchise?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, Sonesta Select Sonesta Essential does not explicitly list a "non-compliance charge." However, it does state that failure to pay amounts due constitutes a material breach of the agreement. In the event of late payments, Sonesta Select Sonesta Essential may assess a late payment charge of 1.5% per month on the unpaid amount, or the maximum amount permitted by applicable law, whichever is less. This charge begins accruing on the first day following the due date.
Furthermore, if Sonesta Select Sonesta Essential has to engage legal counsel or other professionals because of the franchisee's failure to pay monies owed, submit reports, or otherwise comply with the agreement, the franchisee will be responsible for reimbursing Sonesta Select Sonesta Essential for all associated costs and expenses, regardless of whether a legal action is initiated.
It is important to note that these charges and the obligation to reimburse expenses are not considered by Sonesta Select Sonesta Essential as an agreement to accept late payments or an extension of credit to the franchisee. Therefore, while there isn't a specific "non-compliance charge" labeled as such, the financial repercussions of failing to comply with the franchise agreement can be significant for a Sonesta Select Sonesta Essential franchisee.