AStrongest tier63/100FDD 2026
Microtel Inn & Suites by Wyndham: Litigation & Risk
Lodging · FDD Items 3, 4 & 5
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
- 01MINORDeclining unit count (-1.8% YoY) indicates system contraction and potential saturation or performance issues
- 02HIGHMaterial litigation disclosed involving price-fixing, fee transparency, breach of contract, and data security—suggests franchisor governance and legal compliance concerns
- 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
- 04MINORHigh capital requirement ($7.5M-$9.6M) combined with 6% royalty creates substantial fixed costs with unvalidated revenue potential
- 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.