F93/100FDD 2022
Park Plaza — 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
93 / 100
FranchiseVerdict composite
Rating
AVOID
STRONG / MODERATE / CAUTION / AVOID
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
Minnesota
State whose law governs disputes — relevant if you're not based there
What drove the 93/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern status is FALSE — indicates franchisor financial distress or inability to support franchise system
- 02MINOROnly 1 unit in system with unknown growth trajectory — no viable franchise model validation or unit economics proof
- 03MINORNo Item 19 financial performance disclosure — cannot verify average unit volumes, profitability, or ROI claims
- 04MINORMassive investment requirement ($11.9M+) with no revenue/income transparency creates extreme financial risk
- 05MED4% royalty on room revenue only sustainable if occupancy and ADR data are disclosed and verifiable
- 06MINOR20-year term locks franchisee into relationship with unproven, potentially failing franchisor
- 07MINOR$50K franchise fee is unusually low relative to $11.9M investment — suggests either misaligned incentives or undercapitalized franchisor
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.