AStrongest tier76/100FDD 2026
Expedia Cruises: Litigation & Risk
Recreation & Entertainment · FDD Items 3, 4 & 5
Moderate: Review
2 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 2
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 76 / 100
- FranchiseVerdict composite · higher is better
- Rating
- A
- A / B / C / D / F verdict grade
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
- Not waived
- Non-compete
- 2 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
- WA
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
One case: CruiseShipCenters Western Canada Ltd. v. MRMA Travel Ltd. (2018, British Columbia; discontinued Jan 2024). One case: The Kay Group LLC v. CruiseShipCenters USA Inc. (arbitration 2024; franchisee withdrew claims March 2025).
What drove the 76/100 verdict
Risk Score Breakdown
- 01MINORUnit count declining 5.1% YoY (93 units) indicates system contraction and potential market saturation or franchisee dissatisfaction
- 02MEDNo average net income disclosed despite $4.26M average revenue—suggests thin margins, operational challenges, or franchisor unwillingness to disclose profitability
- 03HIGHTwo litigation events within recent period (CWC affiliate lawsuit and Kay Group arbitration) signal franchisor-franchisee relationship strain and governance concerns
- 04MED9% royalty on gross revenues is high relative to travel/booking business model and compounds pressure on undisclosed net margins
- 05MINOR$149,300-$258,545 initial investment with $49,000 franchise fee requires significant capital but lacks clear ROI transparency
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.