FDD Items 3 & 4 · 2026 filing
Choice Hotels International In litigation history
What Choice Hotels International In disclosed about lawsuits, arbitrations and bankruptcy in the 2026 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
- 10
- Item 3, as counted in the filing
- Largest disclosed settlement
- $779K
- As stated in Item 3
- Bankruptcy (Item 4)
- None
- Franchisor, parent, predecessor or officer
- Filing year
- 2026
- Disclosures cover the prior ten years
Extracted from the 2026 Franchise Disclosure Document
Item 3: litigation
Several pending matters including a Canadian class action re destination marketing fees ($403M demand), a multi-franchisee RICO/antitrust suit (stayed, compelled to arbitration), a data-misuse/breach of contract suit (dismissed, on appeal), a fraudulent-rebate-scheme arbitration, an Ontario consumer-fee class action, and an individual civil-rights suit; plus dozens of Choice-initiated collection arbitrations against franchisees for unpaid royalties/fees and IP enforcement actions post-termination; resolved matters include a $779K adverse judgment (Highmark) and a $603K fee award in Choice's favor (Dahya).
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?