Sonesta Hotels and Resorts / Royal SonestaFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Sonesta Hotels and Resorts / Royal Sonesta franchise does not disclose total investment in its current FDD, including a $75K franchise fee and an ongoing 5.0% royalty[2]. The 2026 FDD does not disclose unit-level revenue (no Item 19). Verdict grade: D. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2026 FDD issuance
Overview
- Investment
- $1.5M
- 27th pct Lodging
- Avg gross sales
- N/A
- 2nd pct Lodging
- Royalty
- 5.0%
- 4th pct Lodging
- Units
- 48
- 27th pct Lodging
- SBA default
- N/A
Quick verdict · Lodging · color = vs category peers
Green = >15% above Lodging avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
The system contracted 17% year-over-year. Investigate why units are closing.
22 legal cases disclosed in the FDD. Read Item 3 before signing.
Bottom line
- Total investment $1.5M including a $75K franchise fee, 5.0% ongoing royalty.
- Item 19 discloses "ADR, Occupancy, RevPAR, and Contribution" rather than annual gross sales, so unit revenue is not directly comparable.
- Verdict D (Below Average) with a risk score of 75/100.
- 22 litigation matters disclosed in Item 3, higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Sonesta RL Hotels Franchising Inc.
- Parent company
- Red Lion Hotels Corporation (RLHC)
- Incorporated in
- WA
- HQ
- 400 Centre Street, Newton, Massachusetts 02458
- Auditor
- Deloitte & Touche LLP
- Audited financials
- Franchisor revenue
- $51.1M
- vs $58.5M prior year
Overview
About
Franchisees operate upscale hotel properties under the Royal Sonesta brand, managing daily operations including guest services, housekeeping, food and beverage, and front-desk operations. They pay 5% royalty on gross room revenue while maintaining brand standards and marketing requirements set by corporate.
- CEO
- Keith Pierce and Jeffrey Leer
- Headquarters
- MA
- Founded
- 1986
- FDD year
- 2026
- States available
- 24
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $1.5M
- Better than avg vs category
- Liquid capital req'd
- $526K – $1.8M
- Better than avg vs category
- Franchise fee
- $75K
- Better than avg vs category
- Royalty
- 5.0%
- Gross Rooms Revenue · 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 |
| Transfer fee | $125K |
| Renewal fee | $125K |
| Total fee load | 17.5% of rev |
Financial Performance
This brand's FDD disclosed "ADR, Occupancy, RevPAR, and Contribution" in Item 19 rather than annual gross sales. This metric cannot be directly compared across brands, so we omit it from rankings.
vs Lodging averages
How Sonesta Hotels and Resorts / Royal Sonesta Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 48
- Opened
- 0
- Last reporting year
- Closed
- 1
- Turnover rate
- 2.1%
- Company-owned
- 43
- Corporate units in the system
- % franchised
- 10%
- vs corporate-owned
- Multi-unit owners
- Outlier
- Reported value implausible. See FDD Item 20
- Net growth (yr3)
- -16.7%
- Net unit change last year
- 3-yr CAGR
- +66.7%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 0
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 19 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.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA loan disclosures. This brand has only 2 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 2
- Loan volume
- N/A
- Amount data pending
- Median loan
- N/A
- Charge-off rate
- N/A
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 0
- Defaults
- 0
Explore lender portfolios on Bank Reports or regional data on State Reports.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Royal Sonesta exhibits high-risk characteristics including shrinking franchisee base, active multi-front litigation, questionable corporate financial health, and zero profitability transparency.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Deloitte & Touche LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Score breakdown · what drove the 75 / 100 rating
- 01MINORUnit count declining 16.7% YoY (48 units) signals system contraction and franchisee struggles
- 02HIGHMultiple active litigation types (stockholder, tortious interference, breach of contract, trademark infringement, collection suits) suggest operational and legal instability
- 03MINORNo average revenue or net income disclosure prevents ROI validation and indicates poor transparency
- 04HIGHGoing Concern = FALSE suggests financial viability uncertainty at corporate level
- 05MINORUnprotected territory creates direct competition risk from other Sonesta franchisees
- 06MINORHigh 5% royalty on gross rooms revenue with no profitability data means unclear net margins
- 07MINORCollection suits against former franchisees indicate franchisees struggle to meet financial obligations
- 08HIGHRLHC/Sonesta merger litigation ongoing — suggests unresolved integration issues and corporate instability
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 20 years |
|---|---|
| Renewal term | 20 years |
| Allowed renewalsℹ | 1 |
| Protected territory | No |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Massachusetts |
| Litigation count | 22 |
Items 10, 11
Training & Operations
- Classroom training
- 33 hrs
- On-the-job training
- 0 hrs
- Training location
- On-site and off-site
- POS system
- Restaurant Point of Sale (POS) system integrated with PMS and Shift4
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Restaurant Point of Sale (POS) system integrated with PMS and Shift4
Item 20 · call current owners
Franchisee Contacts
33 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Sonesta Hotels and Resorts / Royal Sonesta · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
What do Sonesta Hotels and Resorts / Royal Sonesta franchise owners earn?
Sonesta Hotels and Resorts / Royal Sonesta does not disclose average franchise owner earnings in their FDD Item 19. Not all franchisors are required to make financial performance representations. We recommend asking existing franchisees directly about their financial experience.
What is Sonesta Hotels and Resorts / Royal Sonesta's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Sonesta Hotels and Resorts / Royal Sonesta (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 Hotels and Resorts / Royal Sonesta franchise locations are there?
As of their most recent FDD filing, Sonesta Hotels and Resorts / Royal Sonesta has 48 total units in the United States, including 3 franchised units and 43 company-owned units.
Is Sonesta Hotels and Resorts / Royal Sonesta a good franchise to buy?
FranchiseVerdict rates Sonesta Hotels and Resorts / Royal Sonesta as a D-grade franchise with a risk score of 75 out of 100, based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. 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.