Under what circumstances can Sonesta Select Sonesta Essential terminate the agreement with advance notice?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
l claims against us and our affiliates and our and their owners, officers, directors, employees, agents, successors, and assigns. We will consider your or your owners' failure to sign these agreements and releases and to deliver them to us for acceptance and execution (together with
the renewal fee) within 30 days after their delivery to you to be an election not to acquire a successor franchise.
14. TERMINATION OR SUSPENSION OF AGREEMENT.
- A. Termination or Suspension by Us on Advance Notice. Except in the case of an immediate termination as provided in Section 14.B below, we have the right to terminate this Agreement if you fail to cure an Event of Default within 30 days after we furnish notice of default to you based on the Event of Default, or, if there is a non-monetary Event of Default that is incapable of cure within 30 days, if you fail to diligently pursue cure of such default and fail to cure the default within the additional time periods we set forth in the notice of default.
- (1) An "Event of Default" will occur if you fail to satisfy or comply with any of the obligations, requirements, conditions, or terms set forth in (i) this Agreement, the Brand Standards (including the minimum performance scores required by the Brand Manual), or any attachment to this Agreement; or (ii) any other agreement you have with us, or an Entity, relating to your Hotel, including, any computer system agreement, or any agreement to manage your Hotel. An "Event of Default" will also occur if you make any misrepresentations to us, whether in entering into this Agreement, or in the performance of your obligations to us.
- (2) Our notice of termination will not relieve you of your obligations under this Agreement or any of its attachments.
- (3) Upon notice of an Event of Default, we also may at any time, at our sole discretion, suspend our obligations under this Agreement (including Central Reservation Services as more fully described below) and may remove the listing of your Hotel from any directories we publish, and from any advertising we publish, or to remove or suspend you from the Central Reservation System immediately without notice to you, and/or rescind any terms to this Agreement that were negotiated between the parties. We will have the right to divert reservations previously made for your Hotel to other Network Hotels after giving you notice of an Event of Default.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, the company can terminate the franchise agreement with advance notice if the franchisee fails to correct an Event of Default within 30 days after receiving notice. An Event of Default includes failing to meet obligations outlined in the agreement, brand standards, or any attachments to the agreement. It also covers breaches of any other agreements with Sonesta Select Sonesta Essential or related entities concerning the hotel, such as computer system or management agreements. Misrepresentations made to Sonesta Select Sonesta Essential also constitute an Event of Default.
If the Event of Default is not monetary and cannot be resolved within 30 days, Sonesta Select Sonesta Essential requires the franchisee to diligently pursue a resolution. The franchisor will specify the additional time allowed for correcting the default in the notice. Failure to diligently pursue and complete the cure within the given timeframe will result in termination.
Upon issuing a notice of default, Sonesta Select Sonesta Essential has the option to suspend its obligations under the agreement, including Central Reservation Services. They may also remove the hotel's listing from directories and advertising and divert reservations to other Network Hotels. If the franchisee rectifies the default within the specified period, including paying all due amounts and an administrative fee, Sonesta Select Sonesta Essential will reinstate the hotel's services, but is not required to redirect previously diverted reservations.