Marriott Hotel / JW Marriott: Litigation & Risk
Lodging · FDD Items 3, 4 & 5
Moderate: Review
5 cases disclosed in FDD Items 3 and 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 5
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 86 / 100
- FranchiseVerdict composite · higher is better
- Rating
- A
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 11
- Government-backed loans issued
- Charge-off rate
- 0.0%
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- 0 loans
- Loans charged off or defaulted
- Total loan volume
- $26.1M
- Avg loan size
- $2.4M
- Participating lenders
- 9
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
- No
- Franchisor can match any purchase offer when you try to sell
- Governing law
- MD
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
Ongoing data breach litigation from 2018 Starwood incident (MDL plus thousands of individual plaintiffs in NY state court); Canadian class action; two hotel antitrust class actions (Portillo, Segal); franchisee credit card proceeds dispute (SRG Investment). Concluded cases include resort fee class actions, UK ICO penalty, FTC/AG settlements totaling $52M+, Chicago settlement $5.8M.
What drove the 86/100 verdict
Risk Score Breakdown
- 01MINORMinimal unit growth (2.0% YoY) suggests market saturation or franchisee dissatisfaction in luxury hotel segment
- 02MINORNo Item 19 financial disclosure prevents validation of actual franchisee profitability claims despite 6% + 3% royalty burden
- 03HIGHSignificant ongoing litigation from 2018 Starwood data breach, resort fee investigations, and antitrust claims creates operational and reputational risk
- 04MEDHigh capital barrier and 20-year commitment with no disclosed average net income creates asymmetric risk for franchisee vs. franchisor
- 05MINORLuxury hotel segment vulnerable to economic downturns, travel disruption, and labor cost inflation affecting already-thin margins
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.