Sonesta Select / Sonesta Essential
Bottom line
- Total investment $957K – $18.6M including a $65K franchise fee, 5.0% ongoing royalty.
- No Item 19 financial performance data disclosed — the franchisor chose not to publish revenue figures.
- Rated MODERATE with a risk score of 56/100. SBA loan default rate of 0.0% across 18 loans (below the industry average).
- 19 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 Select / Sonesta Essential unit return on the cash you put in?
Unlevered ROIC · per unit
1%
Below typical band (30–60%)
Overview
About
Franchisees own and operate select-service and essential-service hotel properties under the Sonesta brand, handling day-to-day guest services, housekeeping, front desk operations, maintenance, and revenue management. Franchisees must maintain brand standards, pay 5% of gross room revenue in royalties, and manage P&L while relying on the franchisor for brand marketing, reservation systems, and loyalty program support.
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 · 15 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
Sonesta Select/Essential presents CAUTION-level risk due to absent financial transparency, active litigation affecting franchisor credibility, unprotected territories, and evidence of franchise agreement disputes — suitable only for operators with deep hotel experience and legal review.
Score breakdown · what drove the 56 / 100 rating
- 01MEDNo Item 19 financial performance data disclosed — impossible to validate ROI claims or benchmark against system average
- 02HIGHActive putative class action litigation regarding merger suggests potential governance/disclosure issues that could affect franchisee protections
- 03MINORMultiple concluded and ongoing franchise agreement disputes (breach of contract, non-performance) indicate systemic franchisor-franchisee relationship problems
- 04MINORUnprotected territory creates direct competition risk — new company-owned or franchised units could cannibalize existing locations
- 05MINORRapid 14.3% YoY unit growth without transparent financial data raises concerns about growth quality vs. growth speed
- 06MEDHigh investment ceiling ($18.5M) with no disclosed average net income creates extreme uncertainty on payback period
- 07HIGHTrademark infringement litigation suggests brand IP vulnerabilities that could affect franchisee marketing and operations
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
25 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Sonesta Select / Sonesta Essential · FDD (2024) PDF