FranchiseVerdict
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A53/100FDD 2025

Affordable Suites of America — Litigation & Risk

Lodging - Hotels & Motels · FDD Items 3, 4 & 5

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Lower Risk

No litigation cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
53 / 100
FranchiseVerdict composite
Rating
STRONG
STRONG / MODERATE / CAUTION / AVOID

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
1 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
North Carolina
State whose law governs disputes — relevant if you're not based there

What drove the 53/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 financial performance data disclosed — impossible to validate if $5M-$10M investment generates acceptable ROI
  2. 02MEDSmall system of only 30 units with 20% YoY growth suggests limited scale, weak brand recognition, and higher operational risk
  3. 03MINORHigh capital requirement ($5M-$10M) combined with unknown profitability creates severe downside exposure
  4. 04MINORDual royalty structure (greater of $2,500/month floor + 5% of GRR) provides minimal relief during low-occupancy periods
  5. 05MINORExtended 20-year term locks franchisee into agreement despite unknown unit economics and small system size

Severity inferred from FDD text — not a regulatory or legal classification

Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.