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B65/100FDD 2026
La Quinta by Wyndham — Litigation & Risk
Lodging - Hotels & Motels · FDD Items 3, 4 & 5
Elevated Risk
18 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
18
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
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
540
Government-backed loans issued
Default rate
9.9%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
27 loans
Loans charged off or defaulted
Total loan volume
$1.6B
Avg loan size
$2.9M
Participating lenders
105
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 65/100 rating
Risk Score Breakdown
- 01MINORUnit count declining 2.3% YoY indicates shrinking system despite 20-year terms and protected territory
- 02HIGHMultiple active litigations including franchisor breach of contract suits against franchisees, antitrust/price-fixing class actions, and consumer protection class actions signal systemic disputes
- 03MEDNo Item 19 (average unit volumes/profitability) disclosed — inability to validate $1.67M-$18.2M investment thesis
- 04MINORFTC settlement for cybersecurity failures raises data protection and consumer trust concerns in hospitality sector
- 05MEDMassive investment range ($1.67M-$18.2M) without disclosed average revenue/net income makes ROI analysis impossible
- 06MINORFranchisor actively suing franchisees for breach of contract suggests enforcement conflicts and potential unfavorable franchise agreement terms
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.