B62/100FDD 2024
Ascend Hotel Collection — Litigation & Risk
Lodging - Hotels & Motels · FDD Items 3, 4 & 5
Elevated Risk
70 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
70
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
32
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$95.3M
Avg loan size
$3.0M
Participating lenders
16
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
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
Maryland
State whose law governs disputes — relevant if you're not based there
What drove the 62/100 rating
Risk Score Breakdown
- 01MINORMinimal system growth (1.7% YoY) with only 177 units suggests stagnation or contraction pressure
- 02MINORMultiple active class action lawsuits regarding destination marketing fees and discriminatory practices indicate systemic franchisor issues affecting profitability
- 03MINOR61 recovery actions initiated by franchisor in prior year suggests widespread franchisee defaults, payment disputes, or breach claims
- 04MINORNo Item 19 financial performance disclosure (Avg Revenue/Net Income not provided) prevents validation of unit economics
- 05MINORUnprotected territory exposes franchisees to direct brand competition and canibalization within same market
- 06MINORWide investment range ($187K–$11.8M) with unclear cost structure creates pricing opacity and unpredictable capital requirements
- 07MINOR5% royalty on gross room revenue (not net) penalizes franchisees during low-occupancy periods common in hospitality
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.