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B65/100FDD 2024

Hyatt Regency Hotel — Litigation & Risk

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

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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
65 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

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
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 65/100 rating

Risk Score Breakdown

  1. 01MEDInvestment range listed as $0–$0 indicates missing or incomplete FDD disclosure of initial capital requirements
  2. 02MEDNo average unit volume (Item 19) or financial performance data disclosed, preventing ROI analysis
  3. 03MEDMinimal unit growth of 2.6% YoY suggests mature/stagnant system with limited expansion opportunity
  4. 04MINORDual royalty structure (6% rooms + 3% F&B) totaling up to 9% is above-market for upscale hotel brands
  5. 05MINOR103 units is relatively small for an established luxury brand, raising questions about franchise model viability
  6. 06MINOR20-year term is longer than industry standard (10-15 years), locking franchisee into extended commitment

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.