Under the Sonesta Select Sonesta Essential agreement, what taxes is the franchisee responsible for?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
C. Taxes. We will have no liability for any sales, use, service, occupation, excise, gross receipts, income, property, or other taxes, whether levied upon you or your Hotel, due to the business you
conduct (except for our income taxes). You are responsible for paying these taxes promptly and must reimburse us for any such taxes that we must pay to any state taxing authority on account of your operation or payments that you make to us.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, the franchisee is responsible for various taxes related to their business operations. Sonesta Select Sonesta Essential will not be liable for any sales, use, service, occupation, excise, gross receipts, income, property, or other taxes levied upon the franchisee or their hotel. The only exception to this is Sonesta Select Sonesta Essential's income taxes.
This means that as a franchisee, you are responsible for promptly paying all applicable taxes related to the operation of your Sonesta Select Sonesta Essential hotel. Furthermore, if Sonesta Select Sonesta Essential is required to pay any of these taxes to a state taxing authority due to your operation or payments you make to them, you must reimburse Sonesta Select Sonesta Essential for those payments.
This allocation of tax responsibilities is standard in franchising. It ensures that the franchisee bears the direct tax burden associated with their business's revenue and property, while Sonesta Select Sonesta Essential is responsible for its own income taxes. Prospective franchisees should factor these tax obligations into their financial planning and consult with a tax professional to understand their specific tax liabilities.