FDD Items 3 & 4 · 2024 filing
MainStay Suites litigation history
What MainStay Suites disclosed about lawsuits, arbitrations and bankruptcy in the 2024 Franchise Disclosure Document. Item 3 lists the material legal actions a franchisor must report; Item 4 covers bankruptcy. This is the franchisor's own disclosure, not a court record, and not legal advice.
Items 3 (litigation) & 4 (bankruptcy) at a glance
What the filing discloses
- Cases disclosed
- 3
- Item 3, as counted in the filing
- Largest settlement, franchisor's own cases
- None stated
- Bankruptcy (Item 4)
- None
- Franchisor, parent, predecessor or officer
- Filing year
- 2024
- Disclosures cover the prior ten years
Extracted from the 2024 Franchise Disclosure Document
Item 3: litigation
Section I discloses 3 pending matters: (1) Norma Knuth v. Radisson (Saskatchewan class action re undisclosed destination marketing fees, $403M demand); (2) Jai Sai Baba LLC v. Choice (E.D. Pa.; ~90 franchisees alleging RICO/Sherman Act/Civil Rights/state franchise law violations, stayed pending individual arbitration); (3) T&T Management v. Choice (M.D. Fla.; breach/data misappropriation re a Country Inn hotel). Section II lists many franchisor-initiated AAA arbitrations and court actions to recover royalties and liquidated damages.
Item 3 (litigation) · 3 matters disclosed · 3 pending listed
Litigation cases
The franchisor
Pending (2)
T&T Management, Inc. v. Choice Hotels International, Inc., Country Inn & Suites by Radisson, Inc. and Sunshine Fund Port Orange, LLC
pendingBrought by a franchisee · filed 2023-06-26 · United States District Court for the Middle District of Florida · 6:23-cv-01187
“… United States District Court for the Middle District of Florida, Case No. 6:23-cv-01187”Page 22 of the 2024 FDD, Item 3
Outcome: “The Court has not yet ruled on the pending Motions.” (page 23)
Jai Sai Baba, LLC, et al. v. Choice Hotels International, Inc., et al.
pendingBrought by a franchisee · filed 2020-06-12 · United States District Court for the Eastern District of Pennsylvania · 2:20-cv-02823
“… United States District Court for the Eastern District of Pennsylvania, Case No. 2:20-cv- 02823 On June 12, 2020 (amended on July 15, 2020), approximately ninety current and former franchise owners that own and operate one or more Choice branded hotels (“Plaintiffs”) filed suit against Choice and Choice Hotels Owner Council”Page 22 of the 2024 FDD, Item 3
Outcome: “On July 29, 2020, Choice filed a motion to stay the litigation and compel individual arbitration proceedings. On March 19, 2021, the Court granted motion. This case remains stayed, and the parties provide the Court with monthly status updates.”
Parent, affiliates, master franchisor and subfranchisor
Pending (1)
Norma Knuth v. Radisson Hotels International, Inc., et al.
pendingCountry Inn & Suites by Radisson, Inc. ('Country') and Radisson Hotels International, Inc. (Choice subsidiaries since 2022), among over 25 defendants · filed 2014-12-05 · Court of Queen's Bench for Saskatchewan · QBG No. 2560 of 2014
“… Court of Queen’s Bench for Saskatchewan, Court File No. QBG No. 2560 of 2014 On December 5, 2014, Norma Knuth filed a complaint under the Class Actions Act against over 25 named defendants, including Country, alleging that the defendants wrongfully collected undisclosed destination marketing fees”Page 21 of the 2024 FDD, Item 3
Outcome: “On August 29, 2019, the court denied Radisson’s motion for summary judgment, holding that it was premature. Radisson intends to reassert its summary judgment motion arguments at the appropriate time.” (page 22)
Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.
Disclosure signals that moved the score
How this shows up in the verdict
- Aggressive litigation pattern: 71 royalty recovery actions in one fiscal year suggests systemic collection issues or franchisee financial distress
- Significant post-termination IP enforcement actions (12 cases) indicate compliance/brand protection problems among departed franchisees
The verdict grade is FranchiseVerdict's editorial assessment across SBA loan performance, unit growth, revenue and disclosure signals. It is not investment advice.
Before you weigh a lawsuit
How to read Item 3
A franchisor must disclose pending actions and any material civil action involving the franchise relationship, plus convictions or civil judgments for fraud, unfair or deceptive practices, or franchise-law violations, going back ten years. A case the franchisor brought against a franchisee counts too. Item 3 does not include every dispute: settled claims below the materiality line and matters resolved in private arbitration can be absent.
Questions worth asking current and former franchisees, using the contact list in Item 20:
- Were you, or anyone you know in the system, party to a dispute with the franchisor?
- Was it resolved by settlement, arbitration or a court, and on what terms?
- Has the number of disputes gone up or down since you signed?