Skip to main content
FranchiseVerdict
Microtel Inn & Suites by Wyndham logo
AStrongest tier63/100FDD 2026

Microtel Inn & Suites by Wyndham: Litigation & Risk

Lodging · FDD Items 3, 4 & 5

Back to overview

Elevated Risk

9 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
9
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
None
Franchisor or officer bankruptcy
Verdict score
63 / 100
FranchiseVerdict composite · higher is better
Rating
A
A / B / C / D / F verdict grade

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
NJ
State whose law governs disputes. Relevant if you're not based there

Extracted from FDD Item 3

Litigation Detail

No pending litigation against the Franchisor. Nine pending cases against parents/affiliates include Canadian class actions (price-fixing/hotel fee), franchisee breach cases, and extended stay antitrust litigation. One resolved case named MISF directly (New Mexico). One pending indemnification suit filed by MISF and affiliates against franchisees.

What drove the 63/100 verdict

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.