Sonesta ES Suites Franchise Cost, Revenue & Review 2026
- Investment
- $982K – $8.8M
- Disclosed sales
- partial, no system average
- SBA charge-off
- Limited · 12 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Sonesta ES Suites is an all-suite extended-stay hotel franchise with kitchen suites for longer stays. Franchisees own and operate individual properties, running suites, housekeeping, and revenue management on Sonesta's systems.
FranchiseVerdict summary · 2026
A Sonesta ES Suites franchise requires a total initial investment of $982K – $8.8M, including a $65K franchise fee and an ongoing 5.0% royalty[2]. The 2026 FDD on file does not yield a unit-revenue figure we can publish. FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: low - issued within the last 12 months
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored5 of 5 headline figures on this page cite a page of the filing.
Overview
- Investment
- $982K – $8.8M
- 24th pct Lodging
- Avg gross sales
- N/A
- Incl. company outletsProjection
- Royalty
- 5.0%
- 3rd pct Lodging
- Units
- 73
- 41st pct Lodging
- SBA charge-off
- N/A
Quick verdict · Lodging · color = vs category peers
Green = favorable by >10% vs Lodging median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $982K – $8.8M including a $65K franchise fee, 5.0% ongoing royalty.
- RETURNSItem 19 discloses hotel-industry ADR/Occupancy/RevPAR/Contribution metrics rather than gross sales figures; no avg_gross_sales/median_gross_sales figure applicable.
- RISKVerdict C (Average), verdict score 45/100 (higher is better).
- GROWTHNegative: net -5 franchised outlets in the latest year (1 opened, 6 closed); 3 signed but not yet open (Item 20).
- FLAGItem 4 discloses a bankruptcy of an officer or of a company an officer ran, not of the franchisor. Review Item 4 for details.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Sonesta RL Hotels Franchising Inc.
- Parent company
- Red Lion Hotels Corporation (RLHC)
- FDD Item 1, page 8 of the 2026 FDD
- Ultimate parent
- Sonesta Holdco Corporation
- FDD Item 1, page 9 of the 2026 FDD
- CEO title
- Co-President
- Keith Pierce
- Incorporated in
- Washington
- HQ
- 400 Centre Street, Newton, Massachusetts 02458
- Auditor
- Deloitte & Touche LLP
- Audited financials
- Franchisor revenue
- $58.5M
- vs $51.1M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Same owner · FDD Item 1, page 9
6 other brands on this site name Sonesta Holdco Corporation as parent or ultimate parent in their own FDD.
- Classico Collection By SonestaC
- MOD A Sonesta CollectionC
- Signature InnC
- Sonesta Hotels and Resorts / Royal SonestaC
- Sonesta Select / Sonesta EssentialB
- Sonesta Simply SuitesB
Grouped by the owner's name as each filing prints it (this page: the 2026 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
Overview
About
- CEO
- Keith Pierce
- Headquarters
- MA
- Founded
- 1986
- FDD year
- 2026
- States available
- 23
Can you afford it, and what does the money buy?
Entry cost runs 45% below the typical lodging franchise.
Source: FDD 2026 · Items 5–7
Full Item 7 breakdown32 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Fee | $65K | $65K | |
| Onboarding Administration Fee | $5K | $5K | |
| Revenue Management System Installation | $2K | $10K | |
| CRS to PMS Interface and Tokenization Set Up Fee | $650 | $4K | |
| IT Implementation Services Fee | $0 | $20K | |
| Property Management System Installation Fee | $9K | $15K | |
| Ancillary System Hardware, Network, Administration | $5K | $25K | |
| Sales Technology Platform Implementation Costs | $2K | $2K | |
| PIP Fee | $5K | $5K | |
| PIP Reinspection Fee | $0 | $5K | |
| Custom Architecture & Design Review | $5K | $15K | |
| Initial Brand Training Fee and Reimbursement of Expenses | $2K | $4K | |
| Initial Training Expenses | $1K | $2K | |
| Real Estate, Legal and Title Expenses | — | — | |
| Construction and Improvement Costs | $104K | $3.0M | |
| Permits, Licenses, Plans, Etc. | $50K | $300K | |
| Furniture, Fixtures, and Equipment | $50K | $3.2M | |
| Operating Supplies and Equipment | $64K | $106K | |
| Contingencies | $50K | $661K | |
| Lender Comfort Letter Fee | $2K | $2K | |
| Total initial investment | $982K | $8.8M |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $982K – $8.8M
- Top 40% of category vs category
- Liquid capital req'd
- $401K – $503K
- Middle of category vs category
- Franchise fee
- $65K
- Top 40% of category vs category
- Royalty
- 5.0%
- typical 6–8%
- Ad fund
- 3.5%
- typical 3–5%
- Total fee load
- 17.5%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 3.5% of gross sales |
| Technology fee | $9 |
| Training fee | $2K |
| Transfer fee | $65K |
| Renewal fee | $65K |
| Inventory (initial) | $64K – $106K |
| Total fee load | 17.5% of rev |
What do units actually make?
Source: FDD 2026 · Item 19
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
No Item 19 revenue figure for Sonesta ES Suites is on file. The return models need a revenue figure to start from, and the operating costs that turn gross sales into a profit are in no FDD. Enter your own and the calculator runs on your assumptions — nothing here is modelled until you do.
Returns model · single-unit ROIC
What would one Sonesta ES Suites unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for annual revenue, COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2026 FDD
Financial Performance
Item 19 discloses hotel-industry ADR/Occupancy/RevPAR/Contribution metrics rather than gross sales figures; no avg_gross_sales/median_gross_sales figure applicable.
Includes company-owned outlets
An occupancy metric, not unit revenue
- Item 19 type
- ADR, Occupancy, RevPAR, and Contribution
- Sample size
- 16
- vs category median 98 · small
- Source filing
- FDD 2026
- The FDD edition these figures were read from
- Transparency
- 4 / 10
- vs category median 0 / 10 · above
Compared against 175 Lodging brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Fee burden
Total ongoing fee load of 17.5% — above the Lodging median of 8.5%.
Disclosure
Item 19 reports ADR, Occupancy, RevPAR, and Contribution rather than annual gross sales, so unit revenue is not directly comparable.
Multi-unit rate
Only 5% of franchisees own multiple units. Could indicate challenging economics or a young system where operators haven't had time to expand.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Lodging medians
How Sonesta ES Suites Compares
Category median of published Lodging brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 73
- Opened
- 1
- Last reporting year
- Closed
- 6
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 10.2%
- Company-owned
- 14
- Corporate units in the system
- % franchised
- 81%
- vs corporate-owned
- Multi-unit owners
- 5.0%
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 3
- 0.04 per open outlet · Item 20 Table 5
- Projected new
- 3
- Franchisor's next-year forecast
- Transfer rate
- 2.7%
- Owners selling to other franchisees
- Ceased ops
- 8.2%
- Units that stopped operating
Last reporting year only, multi-year history not disclosed in this brand's FDD.
Item 20 · 23 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Where the owners are · Item 20 owner list
52 current owners across 23 states.
- CA 8
- TX 7
- FL 4
- AZ 3
- GA 3
- LA 3
- NC 3
- OH 3
- AL 2
- IL 2
- NY 2
- CO 1
- +11 more states
Counts only, from the list the franchisor prints in Item 20; 1 entries carry no state. Names and phone numbers are for your own due diligence and are not shown here.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 12
- Loan volume
- $60.8M
- Median loan
- $5.0M
- 50th percentile
- Charge-off rate
- Limited · 12 loans
- Limited SBA coverage: 12 loans, rate hidden until 10 have resolved and loans reach 2% of franchised units
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- Limited · 12 loans
- 5-yr charge-off
- Limited · 12 loans
- Loans approved 2021+
- Active lenders
- 7
- Defaults
- 0
- Typical loan rate
- 8.8%
- avg rate to borrowers
- Franchised industry avg
- 6.3%
- n=9,970 loans
- Jobs supported
- 203
- 0.5 per loan
- Lender concentration
- 22%
- top lender's share
Borrower mix: 0% went to startups / new businesses, 100% to established operators
Franchise vs independent — in hotels (except casino hotels) and motels, franchised businesses charge off at 6.3% vs 9.2% for independents — franchising is associated with 32% lower SBA default risk in this category.
Top lenders financing Sonesta ES Suites franchisees
Showing 3 of 7 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Sonesta ES Suites from SBA 7(a) FOIA data.
- Principal loss rate
- 0.0%
- Avg SBA guarantee
- 75%
- Avg interest rate
- 8.75%
- Lender concentration
- 22.2%
- Job velocity
- 0.5 per $100K
- NAICS benchmark
- 7.6%
- NAICS 721110
- Jobs supported
- 203
Top SBA lendersTop lender holds 22% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | Metro City Bank | 2 | $10.0M | N/A |
| 2 | American Bank | 2 | $10.0M | N/A |
| 3 | Port 51 Lending LLC | 1 | $5.0M | N/A |
| 4 | GBank | 1 | $5.0M | N/A |
| 5 | Millennium Bank | 1 | $5.0M | N/A |
| 6 | Open Bank | 1 | $5.0M | N/A |
| 7 | Bank of Hope | 1 | $5.0M | N/A |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| GAGeorgia | 3 | 0 | -- |
| ALAlabama | 2 | 0 | -- |
| OHOhio | 2 | 0 | -- |
| ILIllinois | 1 | 0 | -- |
| TXTexas | 1 | 0 | -- |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Hotel franchisor with 15 litigation matters (mostly concluded merger-securities and franchisee collection suits, 6 pending 2025) against a 73-unit system, plus a negative net income of -$7.69M on $58.5M revenue. Bankruptcy disclosed is only an affiliate (Office Properties Income Trust), not the franchisor. Net worth is healthy at $70.5M and financials audited.
Bankruptcy (Item 4)
Subject: an officer. An officer’s own bankruptcy or a company an officer ran, not the franchisor’s
Office Properties Income Trust and certain subsidiaries filed voluntary Chapter 11 bankruptcy petition 25-90530 in United States Bankruptcy Court of Texas (Houston) on October 30, 2025. Principal place of business: Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634.
Audited financials (Item 21)
Yes · Deloitte & Touche LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 45 / 100 verdict
- 01HIGHlitigation_count=15 vs 73 units, 6 pending
- 02MINORfranchisor_net_income=-$7,693,000
- 03MINORaffiliate Chapter 11 (Office Properties Income Trust), not franchisor
- 04MEDnet worth $70.5M, audited, Item 19 disclosed
Severity inferred from the FDD text · not a regulatory classification
Litigation case detail23 matters · Item 3
Litigation cases
The franchisor
Concluded (7)
Red Lion Hotels Franchising, Inc. v. Minnesota Hospitality, Inc.
settledBrought against a franchisee · filed 2019-02-22 · U.S. District Court for the Eastern District of Washington · Case No. 2:19-cv-00061
“Red Lion Hotels Franchising, Inc. v. Minnesota Hospitality, Inc., Case No. 2:19-cv-00061 (U.S. District Court for the Eastern District of Washington). On February 22, 2019, SRLHF filed a lawsuit against defendant, the guarantor of a former franchisee, for breach of its guarantee”Page 20 of the 2026 FDD, Item 3
Outcome:“On October 7, 2019, defendant and SRLHF entered into a settlement and release agreement in which defendant and SRLHF agreed to mutually release one another from certain claims and the defendant agreed to pay SRLHF $150,000 and execute a confession of judgment.”
Red Lion Hotels Franchising, Inc. v. Remo Polselli
dismissedBrought against a franchisee · filed 2019-03-14 · U.S. District Court for the Eastern District of Washington · Case No. 2:19-cv-00082
“Red Lion Hotels Franchising, Inc. v. Remo Polselli, Case No. 2:19-cv-00082 (U.S. District Court for the Eastern District of Washington). On March 14, 2019, SRLHF filed a lawsuit against defendant, the guarantor of a former franchisee, for breach of its guarantee”Page 19 of the 2026 FDD, Item 3
Outcome:“On October 9, 2020, the court granted the parties’ stipulated motion and entered an Order of Dismissal without Prejudice, dismissing all of the parties’ claims without prejudice.”
Linger Chu and His-Hsieh Chu v. Jim Tang, Red Lion Hotels Franchising, Inc. and Does 1-100
settledBrought by a franchisee · filed 2018-06-28 · Superior Court of the State of California, County of Los Angeles · Case No. BC712103
“Linger Chu and His-Hsieh Chu v. Jim Tang, Red Lion Hotels Franchising, Inc. and Does 1-100, Case No. BC712103 (Superior Court of the State of California, County of Los Angeles). On June 28, 2018, plaintiffs filed a lawsuit against SRLHF and third parties for intentional misrepresentation, negligent misrepresentation, and declaratory relief”Page 19 of the 2026 FDD, Item 3
Outcome:“On March 28, 2019, the plaintiffs and SRLHF entered into a Settlement and Release Agreement in which the plaintiffs and SRLHF agreed to mutually release one another from all claims and the plaintiffs agreed to pay SRLHF $250,000 and execute a confession of judgment.”
Radisson Hotels International, Inc. v. Red Lion Hotels Corporation d/b/a RLH Corporation, and Red Lion Hotels Franchising, Inc.
settledThird-party plaintiff · filed 2018-09-26 · U.S. District Court for the Eastern District of Washington · Case No. 2:18-cv-00303
“Radisson Hotels International, Inc. v. Red Lion Hotels Corporation d/b/a RLH Corporation, and Red Lion Hotels Franchising, Inc., Case No. 2:18-cv-00303 (U.S. District Court for the Eastern District of Washington). On September 26, 2018, plaintiff, which is a competitor of RLHC and SRLHF, filed a lawsuit against RLHC and SRLHF for tortious interference with franchise license agreements”Page 18 of the 2026 FDD, Item 3
Outcome:“On August 25, 2021, plaintiff, RLHC and SRLHF entered into a Settlement Agreement and Release in which plaintiff, on the one hand, and RLHC and SRLHF, on the other hand, agreed to mutually release one another from all claims, and, without admitting any liability,”
Red Lion Hotels Franchising, Inc. v. Ghazanfar Khan, et al.
settledBrought against a franchisee · filed 2017-03-13 · U.S. District Court for the Eastern District of Washington · Case No. 2:17-cv-00094, Case No. 2:17-cv-00155
“Red Lion Hotels Franchising, Inc. v. Ghazanfar Khan, et al., Case No. 2:17-cv-00094, Case No. 2:17-cv-00155 (U.S. District Court for the Eastern District of Washington). On March 13, 2017, SRLHF filed a lawsuit against two former franchisees and their guarantors for trademark infringement, false designation of origin and breach of contract”Page 19 of the 2026 FDD, Item 3
Outcome:“On December 28, 2018, the parties entered into a Confidential Settlement and Mutual Release Agreement in which the parties agreed to mutually release each other from all claims, defendants paid to SRLHF $500,000, and defendants agreed to immediately cease all use of our proprietary service marks and trademarks.”
Red Lion Hotels Franchising, Inc. v. JS Three Star Investment Inc.
settledBrought against a franchisee · filed 2016 · District Court of the 422nd Judicial District, Kaufman County, Texas · Case No. 96777-422
“Red Lion Hotels Franchising, Inc. v. JS Three Star Investment Inc., Case No. 96777-422 (District Court of the 422nd Judicial District, Kaufman County, Texas). In December 2016, SRLHF filed a lawsuit against a former franchisee for failure to pay its account, unjust enrichment and breach of contract”Page 20 of the 2026 FDD, Item 3
Outcome:“On December 11, 2017, the parties entered into a confidential settlement agreement in which the”
Red Lion Hotels Franchising, Inc. v. Kumar and Sadikila Vemulapalli
settledBrought against a franchisee · filed 2016-05-12 · Superior Court of Washington, County of Spokane · Case No. 16-2-01814-3
“Red Lion Hotels Franchising, Inc. v. Kumar and Sadikila Vemulapalli, Case No. 16-2- 01814-3 (Superior Court of Washington, County of Spokane). On May 12, 2016, SRLHF filed a complaint against guarantors of a former franchisee seeking to enforce their personal guaranty of a franchise agreement.”Page 20 of the 2026 FDD, Item 3
Outcome:“On December 18, 2018, the parties entered into a Settlement and Release Agreement in which the parties agreed to mutually release each other from all claims and defendants agreed to pay SRLHF $80,000.”
Status not stated in the filing (6)
Sonesta RL Hotels Franchising Inc. v. Bliss Investment LLC and Dr. Chandrakant Shah
Brought against a franchisee · filed 2025-01-15 · United States District Court for the District of Massachusetts · Civil Action No. 1:25-cv-10112-PGL
“Sonesta RL Hotels Franchising Inc. v. Bliss Investment LLC and Dr. Chandrakant Shah, Civil Action No. 1:25-cv-10112-PGL, Filed January 15, 2025 (United States District Court for the District of Massachusetts)”Page 21 of the 2026 FDD, Item 3
Sonesta RL Hotels Franchising Inc. v. Gonzales WS Hospitality LLC and Sal Bhatty
Brought against a franchisee · filed 2025-07-11 · United States District Court for the District of Massachusetts · Civil Action No. 1:25-cv-11973-ADB
“Sonesta RL Hotels Franchising Inc. v. Gonzales WS Hospitality LLC and Sal Bhatty, Civil Action No. 1:25-cv-11973-ADB, Filed July 11, 2025 (United States District Court for the District of Massachusetts)”Page 21 of the 2026 FDD, Item 3
Sonesta RL Hotels Franchising Inc. v. Grain Valley Hospitality, LLC and Riteshkumar Patel
Brought against a franchisee · filed 2025-12-31 · United States District Court for the District of Colorado · Civil Action No. 1:25-cv-04233
“Sonesta RL Hotels Franchising Inc. v. Grain Valley Hospitality, LLC and Riteshkumar Patel, Civil Action No. 1:25-cv-04233, Filed December 31, 2025 (United States District Court for the District of Colorado)”Page 21 of the 2026 FDD, Item 3
Sonesta RL Hotels Franchising Inc. v. MSDS MGT, Inc., Mohkam Sing Bath, and Harjinder Sharma
Brought against a franchisee · filed 2025-05-20 · United States District Court for the District of Massachusetts · Civil Action No. 1:25-cv-11428
“Sonesta RL Hotels Franchising Inc. v. MSDS MGT, Inc., Mohkam Sing Bath, and Harjinder Sharma, Civil Action No. 1:25-cv-11428, Filed May 20, 2025 (United States District Court for the District of Massachusetts)”Page 21 of the 2026 FDD, Item 3
Sonesta RL Hotels Franchising Inc. v. Pardeshi LLC
Brought against a franchisee · filed 2025-10-24 · United States District Court for the District of Massachusetts · Civil Action No. 1:25-cv-13137
“Sonesta RL Hotels Franchising Inc. v. Pardeshi LLC, Civil Action No. 1:25-cv-13137, Filed October 24, 2025 (United States District Court for the District of Massachusetts)”Page 21 of the 2026 FDD, Item 3
Sonesta RL Hotels Franchising Inc. v. SIGMM LLC, Mark Gregson, and Peggy Gregson
Brought against a franchisee · filed 2025-04-15 · United States District Court for the District of Massachusetts · Civil Action No. 1:25-cv-10954-AK
“Sonesta RL Hotels Franchising Inc. v. SIGMM LLC, Mark Gregson, and Peggy Gregson, Civil Action No. 1:25-cv-10954-AK, Filed April 15, 2025 (United States District Court for the District of Massachusetts)”Page 21 of the 2026 FDD, Item 3
Parent, affiliates and predecessor
Concluded (2)
Van Cleave v. Red Lion Hotels Corporation, et al.
dismissedThird-party plaintiff · Red Lion Hotels Corporation ("RLHC"), our parent, and the members of its board · filed 2021-02-09 · U.S. District Court for the District of Delaware · Case No. 1:21-cv-00177
“Van Cleave v. Red Lion Hotels Corporation, et al., Case No. 1:21-cv-00177, Filed February 9, 2021 (U.S. District Court for the District of Delaware)”Page 18 of the 2026 FDD, Item 3
Outcome:“As of March 31, 2021, the plaintiffs in each of these eight lawsuits voluntarily dismissed their respective claims, and on September 8, 2021, the parties entered into an agreement that provided for a mutual release of claims and for RLHC to pay the plaintiffs’ attorneys an aggregate amount of $240,000 in fees.”
Red Lion Hotels Corporation v. Tiya Hospitality, LLC
settledBrought against a franchisee · Red Lion Hotels Corporation ("RLHC"), our parent · filed 2017 · Circuit Court of Jefferson County, Alabama · Case No. CV-2017-902126.00
“Red Lion Hotels Corporation v. Tiya Hospitality, LLC, Case No. CV-2017-902126.00 (Circuit Court of Jefferson County, Alabama). In May 2017, RLHC filed a lawsuit against a former brand member for failure to pay amounts due and breach of contract for failure to pay amounts due.”Page 20 of the 2026 FDD, Item 3
Outcome:“The parties entered into a Confidential Mutual Release and Settlement Agreement on February 19, 2018, under which defendant paid to RLHC $10,500 and the parties agreed to mutually release each other from all claims.”
This list shows 15 of the 23 matters Item 3 discloses; the rest are in the filing.
Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.
What are you signing up for?
Ongoing fees run about 17.5% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 20 years |
|---|---|
| Renewal term | 20 years |
| Allowed renewalsℹ | 1 |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Right of first refusalℹ | No |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Arbitration location | Newton, Massachusetts |
| Jury trial waiver | Yes |
| Governing law | Massachusetts |
| Litigation count | 23 |
Items 10, 11
Training & Operations
- Classroom training
- 33 hrs
- On-the-job training
- 0 hrs
- Training location
- On-site and corporate
- Ongoing training
- Required
- Site selection
- Franchisee (franchisor does not assist with site selection)
- Franchisor financing
- Offered
- Item 10
- POS system
- Shift4 (integration required)
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Shift4 (integration required)
Item 20 · call current owners
Franchisee Contacts
53 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Sonesta ES Suites franchise?
The total investment to open a Sonesta ES Suites franchise ranges from $982K – $8.8M, with an initial franchise fee of $65K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Sonesta ES Suites franchise owners earn?
Item 19 of the Sonesta ES Suites FDD discloses figures for part of the system but no single average across all outlets. These are gross sales figures, not profit; the Revenue section shows what the filing reports and on what basis. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Who owns Sonesta ES Suites?
Sonesta ES Suites is franchised by Sonesta RL Hotels Franchising Inc.. Its parent company is Red Lion Hotels Corporation (RLHC). The ultimate parent named in the FDD is Sonesta Holdco Corporation. Source: FDD Item 1, 2026 filing.
What is Item 19 in the Sonesta ES Suites FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Sonesta ES Suites FDD and qualifies whose outlets they describe.
What is Sonesta ES Suites's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Sonesta ES Suites (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Sonesta ES Suites franchise locations are there?
As of their most recent FDD filing, Sonesta ES Suites has 73 total units in the United States, including 59 franchised units and 14 company-owned units. 1 new units were opened in the latest reporting year.
Is Sonesta ES Suites a good franchise to buy?
FranchiseVerdict rates Sonesta ES Suites as a C-grade franchise with a verdict score of 45 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.