Sonesta Hotels and Resorts / Royal Sonesta
Bottom line
- Total investment $1.5M including a $75K franchise fee, 5.0% ongoing royalty.
- No Item 19 financial performance data disclosed — the franchisor chose not to publish revenue figures.
- Rated CAUTION with a risk score of 75/100. SBA loan default rate of 0.0% across 2 loans (below the industry average).
- 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
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Sonesta Hotels and Resorts / Royal Sonesta unit return on the cash you put in?
Unlevered ROIC · per unit
3%
Below typical band (30–60%)
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.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
Item 20 · unit dynamics
The Growth Chart
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 phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
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.
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
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
33 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Sonesta Hotels and Resorts / Royal Sonesta · FDD (2026) PDF