Under what conditions will Sonesta Select Sonesta Essential assess a late payment charge?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, a late payment charge may be assessed if any amount due from the franchisee is not paid when due. This non-payment constitutes a material breach of the Franchise Agreement.
Specifically, Sonesta Select Sonesta Essential has the right to charge a late fee 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 original due date.
Furthermore, if Sonesta Select Sonesta Essential has to engage legal counsel or other professionals because of the franchisee's failure to pay on time, submit required reports or information, or otherwise comply with the Franchise Agreement, the franchisee will be responsible for reimbursing all associated costs and expenses, regardless of whether a formal legal action is initiated. However, the agreement to assess late fees does not obligate Sonesta Select Sonesta Essential to accept late payments or extend credit to the franchisee.