Sonesta Select / Sonesta Essential Franchise Cost, Revenue & Review 2026
- Investment
- $1.9M – $5.2M
- Disclosed sales
- not disclosed
- SBA charge-off
- Under 10 loans (9)
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Sonesta Select and Sonesta Essential are select-service hotel franchise brands for the midscale and upper-midscale segments. Franchisees own and operate the properties, managing guest services, housekeeping, and revenue under Sonesta standards.
FranchiseVerdict summary · 2026
A Sonesta Select / Sonesta Essential franchise requires a total initial investment of $1.9M – $5.2M, including a $45K – $65K franchise fee and an ongoing 5.0% royalty[2]. This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. FranchiseVerdict grade: B (Above 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: high - issued more than two years ago
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 scored4 of 5 headline figures on this page cite a page of the filing; the rest are marked “Not cited” beside the figure.
Overview
- Investment
- $1.9M – $5.2M
- 26th pct Lodging
- Avg gross sales
- N/A
- Royalty
- 5.0%
- 3rd pct Lodging
- Units
- 61
- 37th 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 $1.9M – $5.2M including a $45K franchise fee, 5.0% ongoing royalty.
- RETURNSThis franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
- RISKVerdict B (Above average), verdict score 55/100 (higher is better).
- GROWTHPositive: net +2 franchised outlets in the latest year (16 opened, 1 closed) (Item 20).
- LEGAL19 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
Corporate structure & franchisor financials
- Legal entity
- Sonesta RL Hotels Franchising Inc.
- Parent company
- Red Lion Hotels Corporation (RLHC)
- Ultimate parent
- Sonesta Holdco Corporation
- Predecessor
- companies
- Prior franchisor entity
- CEO title
- President and Director
- John Murray
- Incorporated in
- Washington
- HQ
- 400 Centre Street, Newton, Massachusetts 02458
- Auditor
- Deloitte & Touche LLP
- Audited financials
- Franchisor revenue
- $55.6M
- vs $54.0M prior year
Same owner · FDD Item 1
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 ES SuitesC
- Sonesta Hotels and Resorts / Royal SonestaC
- Sonesta Simply SuitesB
Grouped by the owner's name as each filing prints it (this page: the 2024 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
- John Murray
- Headquarters
- MA
- Founded
- 1986
- FDD year
- 2024
- States available
- 12
Can you afford it, and what does the money buy?
Entry cost runs 60% below the typical lodging franchise.
Source: FDD 2024 · Items 5–7
FDD Item 7 · 2024 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $45K | $45K |
| Working capital (3–6 mo) | $300K | $600K |
| Equipment, build-out, other | $1.5M | $4.6M |
| Total initial investment | $1.9M | $5.2M |
Source: Sonesta Select / Sonesta Essential 2024 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $1.9M – $5.2M
- Top 40% of category vs category
- Liquid capital req'd
- $300K – $600K
- Top 40% of category vs category
- Franchise fee
- $45K – $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 |
| Transfer fee | $45K |
| Renewal fee | $45K |
| Total fee load | 17.5% of rev |
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
Sonesta Select / Sonesta Essential makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. 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 Select / Sonesta Essential 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: 2024 FDD
Financial Performance
No financial performance representation
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
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
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Operator retention
Net unit growth of +14.3% over 3 years (16 opened, 1 closed).
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 Select / Sonesta Essential 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 2024 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 61
- Opened
- 16
- Last reporting year
- Closed
- 1
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 6.3%
- Company-owned
- 45
- Corporate units in the system
- % franchised
- 26%
- vs corporate-owned
- Net growth (3-yr)
- +14.3%
- Net unit change over 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 4
- Reacquired
- 0
- Franchisor bought back
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 13 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.
Available to sell in · Item 12
- Michigan
- Wisconsin
States where the franchisor is registered to sell new franchises (FDD registration filings).
Where the owners are · Item 20 owner list
17 current owners across 13 states.
- TX 4
- GA 2
- AL 1
- AZ 1
- CA 1
- DE 1
- IA 1
- IL 1
- IN 1
- MA 1
- MD 1
- NC 1
- +1 more states
Counts only, from the list the franchisor prints in Item 20. 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 loan disclosures. This brand has only 9 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 9
- Loan volume
- $43.6M
- Median loan
- $4.8M
- average
- Charge-off rate
- Under 10 loans (9)
- Insufficient SBA coverage: 9 loans, rate hidden below 10
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- Under 10 loans (9)
- 5-yr charge-off
- Under 10 loans (9)
- Loans approved 2021+
- Active lenders
- 3
- Defaults
- N/A
Explore lender portfolios on Bank Reports or regional data on State Reports.
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
56-unit lodging system with 19 litigation matters (1 pending shareholder class action, mostly concluded merger/franchisor-plaintiff suits). Financials are parent-level ($81.1M net worth, +$1.48M net income) so the brand's own equity is not disclosed. No Item 19 and no bankruptcy disclosed.
Litigation (Item 3)
Subject: the franchisor is a named party (defendant).
1 pending shareholder class action re TravelCenters/BP merger against director Adam Portnoy (unrelated to franchise operations); 8 concluded federal merger-disclosure suits re RLHC-Sonesta merger (settled, $240K attorneys fees paid); 10 other concluded suits, mostly franchisor-as-plaintiff actions against former franchisees/guarantors for unpaid fees/breach of guaranty (settlements ranging $10,500-$500,000), plus one competitor tortious-interference suit settled for $500,000.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Deloitte & Touche LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Franchisor-level (Red Lion Hotels Corporation) consolidated revenue, not unit-level franchisee revenue
ⓘ 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: No
- Must buy proprietary products: No
- Restricted to system-approved products: Yes
Score breakdown · what drove the 55 / 100 verdict
- 01HIGHlitigation_count=19 (mostly concluded)
- 02MINORno Item 19 disclosure
- 03MINORparent net income positive +$1,477,000
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 17.5% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2024 · 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 rights | 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 |
| Curable defaultsℹ | 1 |
| Mandatory arbitration | Yes |
| Arbitration location | Within 50 miles of franchisor's then-current principal business address (currently Newton, Massachusetts) |
| Jury trial waiver | Yes |
| Governing law | Massachusetts |
| Litigation count | 19 |
View Item 3 litigation summary
1 pending shareholder class action re TravelCenters/BP merger against director Adam Portnoy (unrelated to franchise operations); 8 concluded federal merger-disclosure suits re RLHC-Sonesta merger (settled, $240K attorneys fees paid); 10 other concluded suits, mostly franchisor-as-plaintiff actions against former franchisees/guarantors for unpaid fees/breach of guaranty (settlements ranging $10,500-$500,000), plus one competitor tortious-interference suit settled for $500,000.
Items 10, 11
Training & Operations
- Classroom training
- 0 hrs
- On-the-job training
- 31 hrs
- Training location
- On-site and franchisor location
- Ongoing training
- Required
- Site selection
- franchisee
- Franchisor financing
- Offered
- Item 10
- POS system
- Oracle OPERA Cloud
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Oracle OPERA Cloud
Item 20 · call current owners
Franchisee Contacts
17 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 Select / Sonesta Essential franchise?
The total investment to open a Sonesta Select / Sonesta Essential franchise ranges from $1.9M – $5.2M, with an initial franchise fee of $45K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Sonesta Select / Sonesta Essential franchise owners earn?
Sonesta Select / Sonesta Essential makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Who owns Sonesta Select / Sonesta Essential?
Sonesta Select / Sonesta Essential 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, 2024 filing.
What is Item 19 in the Sonesta Select / Sonesta Essential 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 Select / Sonesta Essential FDD and qualifies whose outlets they describe.
What is Sonesta Select / Sonesta Essential's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Sonesta Select / Sonesta Essential (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 Select / Sonesta Essential franchise locations are there?
As of their most recent FDD filing, Sonesta Select / Sonesta Essential has 61 total units in the United States, including 16 franchised units and 45 company-owned units. 16 new units were opened in the latest reporting year.
Is Sonesta Select / Sonesta Essential a good franchise to buy?
FranchiseVerdict rates Sonesta Select / Sonesta Essential as a B-grade franchise with a verdict score of 55 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.