B63/100FDD 2026
Destination 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
63 / 100
FranchiseVerdict composite
Rating
MODERATE
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 63/100 rating
Risk Score Breakdown
- 01MEDInvestment range listed as $0–$0 is nonsensical and suggests incomplete/misleading FDD disclosure
- 02MEDNo average unit revenue or net income disclosed (Item 19 absent) — impossible to assess unit economics
- 03MINOROnly 14 units system-wide indicates nascent franchise with minimal track record and scale
- 04HIGHGoing Concern = False is ambiguous but suggests potential financial stability questions at franchisor level
- 05MINOR7% royalty on 'Channel Bookings' only creates revenue uncertainty — unclear what percentage of total bookings qualify
- 06MINORLuxury hospitality franchise model requires significant capital typically; $0 investment claim lacks credibility
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.