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B65/100FDD 2026

Embassy Suites by Hilton — Litigation & Risk

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

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Elevated Risk

15 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
15
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
65 / 100
FranchiseVerdict composite
Rating
MODERATE
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
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
New York
State whose law governs disputes — relevant if you're not based there

What drove the 65/100 rating

Risk Score Breakdown

  1. 01MINORStagnant unit growth (0.8% YoY) suggests franchisee recruitment and retention challenges despite major brand recognition
  2. 02MINORMultiple active antitrust lawsuits and recent AG settlements indicate systemic compliance issues with pricing transparency and guest fee disclosures
  3. 03MEDNo Item 19 financial disclosure (Avg Revenue and Net Income not disclosed) prevents prospective franchisees from validating unit economics or ROI claims
  4. 04MINORUnprotected territory creates direct competition risk; franchisees may face cannibalization from nearby Embassy Suites locations
  5. 05HIGHLitigation pattern shows breach of contract and termination disputes with franchisees, suggesting contentious franchisor-franchisee relationships
  6. 06HIGH23-year term is lengthy given declining unit trajectory and litigation exposure; exit options may be limited

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.