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D75/100FDD 2026
Caption by Hyatt — Litigation & Risk
Lodging - Hotels & Motels · FDD Items 3, 4 & 5
Lower Risk
No litigation cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
75 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID
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
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Illinois
State whose law governs disputes — relevant if you're not based there
What drove the 75/100 rating
Risk Score Breakdown
- 01MEDMassive capital requirement ($25M-$31.5M) with no disclosed average revenue or net income data to justify ROI
- 02MINOROnly 1 existing unit indicates either brand-new concept or severe contraction; impossible to validate unit economics or growth trajectory
- 03HIGHGoing Concern = False suggests franchisor financial instability or startup status, creating existential risk to franchisee support
- 04MINORNo Item 19 financial performance representations eliminates ability to model realistic returns despite $25M+ investment
- 05MINOR20-year term locks franchisee into relationship with unproven, single-unit system with no exit clarity
- 06MINOR5% royalty on 'Gross Rooms Revenue' (not net) compounds burden on already-thin hotel operating margins
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.