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D75/100FDD 2025
MHO Hotels — 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
75 / 100
FranchiseVerdict composite
Rating
CAUTION
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
4
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
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
New Jersey
State whose law governs disputes — relevant if you're not based there
What drove the 75/100 rating
Risk Score Breakdown
- 01MINOROnly 4 units in system with unknown/likely stagnant growth indicates minimal market traction and unproven model scalability
- 02MINORNo average revenue or net income disclosure (no Item 19) prevents validation of ROI claims and profitability assumptions
- 03HIGHGoing Concern status is FALSE, suggesting potential financial instability at corporate level and franchise support risk
- 04MINORNo protected territory creates direct competition risk between franchisees and leaves door open for brand saturation
- 05MINORWide investment range ($71.6K–$1.2M) indicates inconsistent cost structure and unclear capex requirements
- 06MINORDual royalty options without guidance on which is standard/recommended suggests lack of transparent pricing strategy
- 07MINORExtremely low franchise fee ($9,995) relative to hotel capex may indicate weak corporate infrastructure and minimal franchisor support
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.