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F82/100FDD 2026

Registry Collection Hotels — Litigation & Risk

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

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Elevated Risk

13 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
13
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
82 / 100
FranchiseVerdict composite
Rating
AVOID
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
1
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted

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 Jersey
State whose law governs disputes — relevant if you're not based there

What drove the 82/100 rating

Risk Score Breakdown

  1. 01HIGHExtremely high investment ($28.9M+) with only 2 units system-wide indicates severe scaling failure and potential going concern risk
  2. 02HIGHZero disclosed average revenue and net income data prevents ROI validation; combined with going concern status, suggests financial distress
  3. 03HIGHMultiple active litigations including price-fixing class actions, breach of contract suits against franchisees, and privacy breaches indicate systemic legal and operational issues
  4. 04MINOR100% YoY growth on only 2 units is mathematically meaningless and masks a contracting system with no franchisee demand
  5. 05HIGH20-year term locks franchisees into relationship with undercapitalized franchisor facing potential bankruptcy
  6. 06HIGHMandatory Canadian fee litigation suggests aggressive fee structures and regulatory compliance failures

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.