FDD Items 3 & 4 · 2025 filing
Delta Hotels by Marriott litigation history
What Delta Hotels by Marriott disclosed about lawsuits, arbitrations and bankruptcy in the 2025 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
- 16
- Item 3, as counted in the filing
- Largest disclosed settlement
- $52.0M
- As stated in Item 3
- Bankruptcy (Item 4)
- None
- Franchisor, parent, predecessor or officer
- Filing year
- 2025
- Disclosures cover the prior ten years
Extracted from the 2025 Franchise Disclosure Document
Item 3: litigation
Multiple active and concluded cases. Active: trademark infringement suit by Delta Air Lines; data breach MDL (In re Marriott, MDL 19-md-2879) and City of Chicago case; Canadian data breach class action; DC resort fee lawsuit; antitrust suits (Portillo/CoSTAR, Segal/Amadeus); jury verdict of $16M in Hall v. Marriott (NC). Franchisor-initiated: arbitration awards won against franchisees. Concluded: several settled matters including $52M AG settlement and ICO £18.4M penalty related to 2018 data breach.
Disclosure signals that moved the score
How this shows up in the verdict
- Going concern status indicates material doubt about franchisor's ability to continue operations and support franchisees
- Extensive litigation portfolio including trademark disputes with Delta Air Lines, multiple class-action lawsuits, data security breaches affecting reservations, and franchisor-initiated collection actions suggests systemic operational and legal vulnerabilities
- 2018 Starwood database breach with ongoing litigation indicates unresolved guest trust and cybersecurity issues that impact franchisee operations and liability exposure
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?