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B59/100FDD 2025
Motel 6 — Litigation & Risk
Lodging - Hotels & Motels · FDD Items 3, 4 & 5
Moderate — Review
5 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
5
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
59 / 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
466
Government-backed loans issued
Default rate
2.8%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
7 loans
Loans charged off or defaulted
Total loan volume
$1.1B
Avg loan size
$2.3M
Participating lenders
131
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
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 59/100 rating
Risk Score Breakdown
- 01MINORDeclining unit count (-0.9% YoY) signals shrinking franchise system despite 1,195 locations
- 02MEDNo disclosed average revenue or net income (Item 19) prevents financial performance validation and suggests weak or inconsistent unit economics
- 03HIGHMultiple active litigation cases including franchise termination disputes, data privacy class actions, and franchisor collection actions indicate systemic operational and legal friction
- 04HIGHData privacy litigation (Jane V. class action, Washington State action) over guest information disclosure to immigration authorities creates reputational and operational liability risk
- 05MINORFranchisor initiating collection actions against franchisees (G6 Hospitality vs. Aesha LLC) suggests cash flow stress among operators
- 06MED20-year term length is lengthy for a declining brand with limited financial transparency
- 07MEDHigh investment ceiling ($8.2M) with 5% royalty on undisclosed revenues creates uncertainty on ROI calculations
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.