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B62/100FDD 2024

AmericInn — Litigation & Risk

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

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Elevated Risk

12 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
12
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
62 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

7(a) FOIA data · FY2020–present

SBA Loan Performance

Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.

Total 7(a) loans
16
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$19.6M
Avg loan size
$1.2M
Participating lenders
14

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

Contract Risk Indicators

Mandatory arbitration
Not required
You retain the right to sue in court
Jury trial waiver
Waived
You give up the right to a jury trial
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
No
Franchisor can match any purchase offer when you try to sell
Governing law
New Jersey
State whose law governs disputes — relevant if you're not based there

What drove the 62/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is FALSE — franchisor's financial viability is questioned
  2. 02HIGHExtensive litigation portfolio including price-fixing, antitrust, fraud, and state franchise act violations creates legal and reputational risk
  3. 03MINORMinimal unit growth (1.4% YoY) with only 218 units suggests stagnant or contracting system
  4. 04MINORNo Item 19 disclosure (Avg Revenue/Net Income) prevents financial performance validation and indicates poor unit economics transparency
  5. 05HIGHHigh litigation exposure against franchisees for outstanding sums suggests collection problems and franchisor-franchisee relationship deterioration
  6. 06HIGHMultiple consumer fraud allegations (resort fees, call recording) expose franchisees to regulatory scrutiny and brand reputation damage
  7. 07MINORWide investment range ($295K–$10.4M) with no average revenue data creates uncertainty about ROI and comparable performance
  8. 08MINORPrice-fixing allegations through revenue management software could trigger regulatory penalties affecting all franchisees' operations

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.