D75/100FDD 2024
City Express by Marriott — Litigation & Risk
Lodging - Hotels & Motels · FDD Items 3, 4 & 5
Elevated Risk
20 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
20
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
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 75/100 rating
Risk Score Breakdown
- 01HIGHGoing concern status is FALSE, indicating potential financial viability questions at corporate level
- 02MEDZero disclosed franchise units with unknown growth trajectory suggests brand either new, failing, or data transparency issues
- 03HIGHExtensive litigation portfolio including data security class action, state AG investigations, antitrust claims, and contractual disputes indicates systemic corporate governance problems
- 04MINORNo average revenue or net income disclosure (no Item 19) prevents ROI validation on $2.75M-$4.85M investment
- 05MINORUnprotected territory creates direct competition risk and revenue cannibalization among franchisees
- 06MINOR5% royalty on gross room sales (not net) combined with high capex requirements creates margin squeeze risk
- 07HIGHMarriott brand association provides some credibility, but litigation suggests parent company distance or weak oversight
- 08MINOR20-year term locks franchisees into relationship with litigious corporate entity
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.