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B57/100FDD 2026

Fairfield by Marriott — Litigation & Risk

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

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Elevated Risk

20 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
20
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
57 / 100
FranchiseVerdict composite
Rating
MODERATE
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
225
Government-backed loans issued
Default rate
1.1%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$695.3M
Avg loan size
$3.1M
Participating lenders
50

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 57/100 rating

Risk Score Breakdown

  1. 01MINORSignificant capital requirement ($12.3M–$34.5M) with no Item 19 financial disclosure to validate ROI expectations
  2. 02MINORStagnant unit growth (1.5% YoY) suggests market saturation and declining franchise appeal
  3. 03HIGHMulti-jurisdictional data breach litigation (2018 Starwood incident) with ongoing FTC, ICO, KVKK, OPC, and OAIC investigations creates reputational and compliance risk
  4. 04MINORUnprotected territory allows Marriott to saturate markets with competing Marriott brands, cannibilizing franchisee revenue
  5. 05HIGHAntitrust litigation regarding STR reports and pricing software indicates potential franchisor control over competitive positioning
  6. 06MINORMultiple class action lawsuits on resort/destination fees and credit card processing create operational and legal exposure for individual properties

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.