FranchiseVerdict
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D69/100FDD 2026

ECHO Suites Extended Stay by Wyndham — Litigation & Risk

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

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Elevated Risk

13 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
13
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
69 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID

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
Non-compete
20 yrs
Post-termination restriction on similar businesses
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 69/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is FALSE — franchisor may lack financial stability to support franchisees
  2. 02MINORExplosive unit growth (260% YoY) with only 18 units suggests instability, not health; growth from ~7 to 18 units is unsustainable trajectory indicator
  3. 03HIGHMultiple active class action litigations (price-fixing, misleading fees, privacy violations, antitrust) expose franchisees to brand reputation and potential liability
  4. 04MINORNo average revenue or net income disclosure (Item 19) prevents validation of $11.6M–$17.4M investment ROI claims
  5. 05HIGHHigh capital requirement ($11.6M–$17.4M) paired with undisclosed profitability and going concern risk creates severe financial exposure
  6. 06MINORAntitrust class action (In Re Extended Stay Hotel) implicates entire franchisor business model and pricing practices
  7. 07HIGHLitigation where franchisor is plaintiff (LuxUrban breach of contract) suggests franchisor-franchisee relationship tension

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.