A53/100FDD 2024
Hyatt House — Litigation & Risk
Lodging - Hotels & Motels · FDD Items 3, 4 & 5
Lower Risk
No litigation cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
53 / 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
3
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$14.9M
Avg loan size
$5.0M
Participating lenders
3
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
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Illinois
State whose law governs disputes — relevant if you're not based there
What drove the 53/100 rating
Risk Score Breakdown
- 01MEDMassive capital requirement ($13.6M–$40.1M) with no disclosed average revenue or net income creates opacity on ROI and payback period
- 02MEDNo Item 19 (financial performance representations) disclosed — impossible to validate realistic earnings expectations
- 03MINORSlow unit growth (7.0% YoY) for an extended-stay brand in a competitive market suggests mature/saturating segment or franchisee acquisition challenges
- 04HIGHGoing Concern flag is FALSE but absence of explicit financial health statements raises questions about franchisor stability and support capacity
- 05MINOR5% royalty on gross rooms revenue (not net) means royalties are owed regardless of profitability — high fixed cost burden
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.