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A42/100FDD 2026

Expedia Cruises — Litigation & Risk

Other · FDD Items 3, 4 & 5

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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)
—
Franchisor or officer bankruptcy
Overall risk score
42 / 100
FranchiseVerdict composite
Rating
STRONG
STRONG / MODERATE / CAUTION / AVOID

7(a) FOIA data · FY2020–present

SBA Loan Performance

Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.

Total 7(a) loans
18
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted

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
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
Washington
State whose law governs disputes — relevant if you're not based there

What drove the 42/100 rating

Risk Score Breakdown

  1. 01MINORUnit count declining 5.1% YoY (93 units) indicates system contraction and potential market saturation or franchisee dissatisfaction
  2. 02MEDNo average net income disclosed despite $4.26M average revenue—suggests thin margins, operational challenges, or franchisor unwillingness to disclose profitability
  3. 03HIGHTwo litigation events within recent period (CWC affiliate lawsuit and Kay Group arbitration) signal franchisor-franchisee relationship strain and governance concerns
  4. 04MED9% royalty on gross revenues is high relative to travel/booking business model and compounds pressure on undisclosed net margins
  5. 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.