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B57/100FDD 2026

Microtel Inn & Suites by Wyndham — Litigation & Risk

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

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Elevated Risk

15 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
15
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
57 / 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
77
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
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 57/100 rating

Risk Score Breakdown

  1. 01MINORDeclining unit count (-1.8% YoY) indicates system contraction and potential saturation or performance issues
  2. 02HIGHMaterial litigation disclosed involving price-fixing, fee transparency, breach of contract, and data security—suggests franchisor governance and legal compliance concerns
  3. 03MEDNo Item 19 financial performance data (Avg Revenue and Net Income not disclosed) prevents prospective franchisees from validating ROI assumptions on $7.5M-$9.6M investment
  4. 04MINORHigh capital requirement ($7.5M-$9.6M) combined with 6% royalty creates substantial fixed costs with unvalidated revenue potential
  5. 05MINOR20-year term locks franchisee into relationship with litigious franchisor; exit costs likely high given capital intensity

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.