Signature Inn
Signature Inn By Sonesta offers branded hotel franchises, known for their managed service hotels with modern amenities, in the hospitality industry.
Signature Inn franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to convert an existing hotel into a 40-room Signature Inn By Sonesta Hotel ranges from $201,559 to $769,064. For a newly-constructed 40-room hotel, the range is much higher, from $4,607,459 to $7,129,164. [p.1]
What is the initial franchise fee?
The Initial Fee is fully earned and non-refundable, ranging from $10,000 to $20,000 during the 2025 fiscal year for Signature Inn Hotels with between 47 and 137 guest rooms, respectively [p.23]. This fee must be paid before countersigning the Franchise Agreement, unless installment payments are agreed upon [p.23].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is $42 per Guest Room, with a minimum monthly payment of $2,520 [p.75]. These payments must be made regardless of sales levels or business interruptions [p.4, p.77], and are due on the 15th day of each month for the preceding month's fees [p.77].
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts. The provided FDD does not detail the length of the initial franchise agreement or the conditions for renewal.
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you cannot sell, encumber, pledge, mortgage, assign, or otherwise transfer this Agreement, your ownership interests, or substantially all of the Hotel's assets without prior consent from the franchisor [p.83]. However, if you are in compliance with the agreement and meet certain conditions, the franchisor may not unreasonably withhold consent to a proposed transfer [p.83]. These conditions include paying an initial fee equal to the Initial Fee, providing requested information about the transferee, and ensuring the transferee meets franchisee criteria among others [p.83].
On what grounds can the franchisor terminate the agreement?
This isn't specified in the excerpts. The provided FDD excerpts primarily detail the conditions under which a franchisee can terminate the agreement and mention that a franchisor cannot cancel a franchise without reasonable cause as defined by law, but do not specify the grounds for the franchisor to terminate the agreement.
What financial requirements — net worth and liquid capital — do I need to qualify?
The franchisor's most recent financial statements must show a net worth of at least $100,000; otherwise, the franchisor is required to arrange for the escrow of initial investment funds until obligations are fulfilled [p.6]. This isn't specified in the excerpts regarding minimum net worth or liquid capital requirements for qualifying as a franchisee.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. The FDD states that you may face competition from other franchisees, outlets owned by the company, or other competitive brands [p.54]. Additionally, the franchisor retains the right to grant franchises in your area under certain circumstances [p.54], and does not provide any territorial protection [p.75(c)].
What training and ongoing support does the franchisor provide?
The franchisor provides initial brand training before opening or within 90 days of activation in their system. This training covers areas such as operations, marketing, sales, loyalty programs, and brand culture [p.50, p.77]. The training can be conducted virtually or at a designated location and may include additional attendees if space allows. Verification of successful completion is required, and failure to complete the training satisfactorily could result in termination of the franchise agreement [p.77]. Ongoing support includes periodic training courses, including third-party programs, with current fees not exceeding $2,000 per day (on-site) or $200 per hour (virtual), not more than two courses or three business days per year [p.77]. Additionally, you have access to the franchisor's IT Help Desk for support and can use their owner's information portal [p.77]. This ongoing training or advice may be modified or discontinued at the franchisor’s discretion, and attendees may be required to sign confidentiality agreements [p.77].
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor does not make any representations about future or past financial performance except for providing actual records of an existing outlet if you are purchasing one. However, they can provide financial performance information if there is a reasonable basis and it is included in the disclosure document [p.62]. Any other financial performance information received should be reported to the franchisor's management as well as relevant regulatory agencies [p.65].
What am I restricted to selling, and where must I buy supplies?
You are restricted from operating a similar business during the term of the franchise, as specified on page [p.3]. Additionally, you may have to buy or lease items from the franchisor or a limited group of suppliers it designates, which might be more expensive than other options, according to page [p.3].