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F85/100FDD 2024

Everhome Suites — Litigation & Risk

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

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Elevated Risk

92 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
92
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
85 / 100
FranchiseVerdict composite
Rating
AVOID
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
No
Franchisor can match any purchase offer when you try to sell
Governing law
Maryland
State whose law governs disputes — relevant if you're not based there

What drove the 85/100 rating

Risk Score Breakdown

  1. 01MEDMassive capital requirement ($12.7M–$16.2M) with zero disclosed average unit economics or revenue benchmarks, making ROI impossible to validate
  2. 02MINOROnly 1 unit in system with unknown growth trajectory indicates either pre-revenue concept or system collapse; no franchisee success data available
  3. 03HIGHActive litigation from franchisor (Choice Hotels) pursuing 85+ royalty recovery actions suggests systemic franchisee default/failure and aggressive collection tactics
  4. 04MINORThree pending class action suits regarding destination marketing fees and anti-competitive practices indicate potential hidden costs and legal exposure for new franchisees
  5. 05HIGHNo Item 19 financial performance disclosure combined with going concern=False signals either undisclosed losses or franchisor unwillingness to document unit profitability
  6. 06MINORZero territory protection in extended-stay/hotel market creates cannibalization risk and price competition from future franchisees
  7. 07MINOR20-year term locks franchisees into relationship with litigious franchisor under unfavorable unit economics

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.