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B59/100FDD 2026

Hawthorn Extended Stay by Wyndham — Litigation & Risk

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

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Elevated Risk

13 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
13
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
59 / 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
No
Franchisor can match any purchase offer when you try to sell
Governing law
New Jersey
State whose law governs disputes — relevant if you're not based there

What drove the 59/100 rating

Risk Score Breakdown

  1. 01MINORNo Item 19 financial performance disclosure (avg revenue/net income) prevents ROI validation on $12.6M-$15.3M investment
  2. 02HIGHActive class action litigation against parent Wyndham for price fixing, antitrust, misleading fees, and data security breaches creates brand/operational risk
  3. 03MEDModest unit growth of 15.5% YoY with only 82 total franchises suggests limited scale and market validation for the extended-stay segment
  4. 04MEDHigh capital requirement ($12.6M-$15.3M) combined with undisclosed profitability creates asymmetric risk for franchisees
  5. 05MINORFTC settlement history on cybersecurity indicates prior data breach exposure affecting customer trust and operational compliance

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.