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F85/100FDD 2024

Postcard Cabins — Litigation & Risk

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

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Elevated Risk

18 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
18
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
85 / 100
FranchiseVerdict composite
Rating
AVOID
STRONG / MODERATE / CAUTION / AVOID

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
2 yrs
Post-termination restriction on similar businesses
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
Maryland
State whose law governs disputes — relevant if you're not based there

What drove the 85/100 rating

Risk Score Breakdown

  1. 01HIGHGoing concern status indicates franchisor financial distress and potential inability to support franchisees
  2. 02MINORZero operating units with unknown growth trajectory suggests failed or non-existent franchise system
  3. 03HIGHMajor data security litigation (Starwood breach) and government investigations create ongoing liability exposure for franchisees
  4. 04MINORNo average revenue or net income disclosure prevents ROI validation on $8.5M-$11.6M investment
  5. 05MINORUnprotected territory combined with no unit growth indicates competitive vulnerability and market saturation risk
  6. 06MEDHigh initial investment ($8.5M+) with 5% royalty on undisclosed revenues creates cash flow uncertainty
  7. 07MINORMultiple putative class actions and antitrust disputes involving affiliates suggest systemic operational/legal problems
  8. 08MINOR20-year term locks franchisees into relationship with financially unstable franchisor
  9. 09MINORResort/destination fee display investigations indicate pricing transparency issues affecting customer trust and revenue

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.