B66/100FDD 2023
Homewood Suites by Hilton — Litigation & Risk
Lodging - Hotels & Motels · FDD Items 3, 4 & 5
Elevated Risk
8 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
8
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
66 / 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
4
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
Total loan volume
$15.8M
Avg loan size
$4.0M
Participating lenders
3
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 York
State whose law governs disputes — relevant if you're not based there
What drove the 66/100 rating
Risk Score Breakdown
- 01MEDMassive capital requirement ($21.4M–$31.8M) with no disclosed average revenue or net income prevents ROI validation
- 02MEDRoyalty escalation (3.5%→5.5%) combined with undisclosed financials creates earnings opacity and unpredictable cash flow
- 03MINORAnemic unit growth (1.8% YoY across 508 units) suggests market saturation or franchisee underperformance
- 04HIGHMultiple active litigation vectors (consumer protection, ADA compliance consent decrees, breach of contract suits) indicate systemic operational/legal vulnerabilities
- 05MINORUnprotected territory enables corporate cannibalization and direct competition from other franchisees
- 06MED22-year term locks capital into a mature, slow-growth segment with limited exit liquidity
- 07MINORNo Item 19 financial disclosure prevents independent verification of unit-level 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.