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D68/100FDD 2026

Days Inn — Litigation & Risk

Lodging - Hotels & Motels · FDD Items 3, 4 & 5

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Elevated Risk

25 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
25
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
68 / 100
FranchiseVerdict composite
Rating
CAUTION
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
1,098
Government-backed loans issued
Default rate
10.2%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
84 loans
Loans charged off or defaulted
Total loan volume
$1.8B
Avg loan size
$1.7M
Participating lenders
228

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Not required
You retain the right to sue in court
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
New Jersey
State whose law governs disputes — relevant if you're not based there

What drove the 68/100 rating

Risk Score Breakdown

  1. 01MINORDeclining unit count (-2.8% YoY) signals weakening franchisee performance and system contraction
  2. 02MINORMultiple class action lawsuits regarding marketing fees, price fixing, and consumer protection violations indicate regulatory and legal exposure
  3. 03MEDNo disclosed average revenue or net income (Item 19 absence) prevents ROI validation and suggests franchisor may be hiding underperformance data
  4. 04MINORWide investment range ($248K–$10.1M) with vague guidance creates opacity around capital requirements and scalability
  5. 05HIGHLitigation between franchisor and franchisees over breach of contract indicates franchise relationship deterioration and enforcement disputes
  6. 06MINORHigh royalty rate (5.5% of gross room revenue) on a declining brand reduces franchisee profitability in competitive budget hotel segment

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.