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D75/100FDD 2025

Project Q by Hilton — Litigation & Risk

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

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Elevated Risk

11 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
11
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
75 / 100
FranchiseVerdict composite
Rating
CAUTION
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
No
Franchisor can match any purchase offer when you try to sell
Governing law
New York
State whose law governs disputes — relevant if you're not based there

What drove the 75/100 rating

Risk Score Breakdown

  1. 01MINORZero operating units with unknown growth trajectory indicates brand has not successfully launched or is in critical early stage with no proof of concept
  2. 02MINORNo average revenue or net income disclosure prevents ROI validation; combined with $2.4M investment and 23-year term, franchisee bears extreme uncertainty
  3. 03HIGHMultiple pending antitrust and breach of contract litigations suggest systemic operational/compliance issues and potential liability exposure for franchisees
  4. 04MINORUnprotected territory creates direct competition risk with other franchisees and Hilton's own properties, eroding revenue protection
  5. 05MINOR5% royalty on gross rooms revenue is aggressive given no demonstrated unit economics or franchisee profitability data
  6. 06MINOR23-year term is unusually long for hospitality with no performance milestones or exit clauses mentioned
  7. 07HIGHGoing Concern = False status suggests parent company financial instability or operational viability questions

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.