AStrongest tier83/100FDD 2024
AmericInn: Litigation & Risk
Lodging · FDD Items 3, 4 & 5
Elevated Risk
8 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 8
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 83 / 100
- FranchiseVerdict composite · higher is better
- Rating
- A
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 30
- Government-backed loans issued
- Charge-off rate
- 0.0%
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- 0 loans
- Loans charged off or defaulted
- Total loan volume
- $48.4M
- Avg loan size
- $1.6M
- 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
Extracted from FDD Item 3
Litigation Detail
No pending litigation against the franchisor itself. Multiple pending class-action/antitrust suits against parent Wyndham Hotels & Resorts and affiliates (IDeaS/SAS revenue-management price-fixing MDL, Canadian destination-marketing-fee class actions, LuxUrban breach of contract). Several resolved historical cases against Wyndham entities (resort fee TCCWNA class action, FTC data-security action, telephone recording class action, antitrust settlement). Franchisor has filed 4 suits against current/former AmericInn franchisees for breach/non-payment in the past year.
What drove the 83/100 verdict
Risk Score Breakdown
- 01HIGHGoing Concern status is FALSE — franchisor's financial viability is questioned
- 02HIGHExtensive litigation portfolio including price-fixing, antitrust, fraud, and state franchise act violations creates legal and reputational risk
- 03MINORMinimal unit growth (1.4% YoY) with only 218 units suggests stagnant or contracting system
- 04MINORNo Item 19 disclosure (Avg Revenue/Net Income) prevents financial performance validation and indicates poor unit economics transparency
- 05HIGHHigh litigation exposure against franchisees for outstanding sums suggests collection problems and franchisor-franchisee relationship deterioration
- 06HIGHMultiple consumer fraud allegations (resort fees, call recording) expose franchisees to regulatory scrutiny and brand reputation damage
- 07MINORWide investment range ($295K–$10.4M) with no average revenue data creates uncertainty about ROI and comparable performance
- 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.