FDD Items 3 & 4 · 2023 filing
Canopy by Hilton litigation history
What Canopy by Hilton disclosed about lawsuits, arbitrations and bankruptcy in the 2023 Franchise Disclosure Document. Item 3 lists the material legal actions a franchisor must report; Item 4 covers bankruptcy. This is the franchisor's own disclosure, not a court record, and not legal advice.
Items 3 & 4 at a glance
What the filing discloses
- Cases disclosed
- 8
- Item 3, as counted in the filing
- Largest disclosed settlement
- $75.0M
- As stated in Item 3
- Bankruptcy (Item 4)
- None
- Franchisor, parent, predecessor or officer
- Filing year
- 2023
- Disclosures cover the prior ten years
Extracted from the 2023 Franchise Disclosure Document
Item 3: litigation
2 pending actions: Nebraska AG re resort fee disclosures; franchisee breach of contract (Destin Platinum). 6 concluded actions including Starwood trade secret dispute (settled $75M), ADA consent decree, DOJ antitrust, Portland Hotel counterclaim (settled), San Pedro Inn wrongful termination (settled), Hawaii class action resort fees (settled $178K).
Disclosure signals that moved the score
How this shows up in the verdict
- Active pending litigation regarding guest fees and franchise termination suggests operational/contractual disputes and potential franchisor enforcement issues
- History of breach of contract settlements and ADA compliance consent decrees suggests systemic operational or compliance challenges
The verdict grade is FranchiseVerdict's editorial assessment across SBA loan performance, unit growth, revenue and disclosure signals. It is not investment advice.
Before you weigh a lawsuit
How to read Item 3
A franchisor must disclose pending actions and any material civil action involving the franchise relationship, plus convictions or civil judgments for fraud, unfair or deceptive practices, or franchise-law violations, going back ten years. A case the franchisor brought against a franchisee counts too. Item 3 does not include every dispute: settled claims below the materiality line and matters resolved in private arbitration can be absent.
Questions worth asking current and former franchisees, using the contact list in Item 20:
- Were you, or anyone you know in the system, party to a dispute with the franchisor?
- Was it resolved by settlement, arbitration or a court, and on what terms?
- Has the number of disputes gone up or down since you signed?