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D72/100FDD 2024

Arise Suites Extended Stay by Wyndham — Litigation & Risk

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

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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)
—
Franchisor or officer bankruptcy
Overall risk score
72 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID

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
Non-compete
20 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
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 72/100 rating

Risk Score Breakdown

  1. 01MINORZero operating franchise units with unknown growth trajectory indicates brand is pre-revenue or has failed to recruit franchisees despite 20-year term offering
  2. 02MEDNo Item 19 financial performance data disclosed — impossible to validate $304K-$2.4M investment ROI claims or 6% royalty sustainability
  3. 03HIGHMultiple active and resolved class action litigations (destination marketing fees pending, resort fees, website terms, advertising, retaliation, wiretapping) suggest systemic corporate governance and consumer trust issues
  4. 04MEDParent company (Wyndham) disclosed material cybersecurity breaches subject to FTC enforcement — heightened risk of data liability passed to franchisees
  5. 05MINORExtended-stay hotel model requires high capital and operational expertise; zero franchisees suggests market rejection or franchise structure failure
  6. 06MINOR20-year term with $25K franchise fee locks franchisees into relationship with litigious franchisor during uncertain brand establishment phase

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.