Rodeway Inn: Litigation & Risk
Lodging · FDD Items 3, 4 & 5
Elevated Risk
98 cases disclosed in FDD Items 3 and 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 98
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 53 / 100
- FranchiseVerdict composite · higher is better
- Rating
- B
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 339
- Government-backed loans issued
- Charge-off rate
- 4.0%
- vs 16% franchise average
- 5-yr charge-off rate
- 3.3%
- Defaults
- 7 loans
- Loans charged off or defaulted
- Total loan volume
- $520.7M
- Avg loan size
- $1.5M
- Participating lenders
- 103
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
- 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
- Maryland
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
Three pending cases: (1) Norma Knuth v. Radisson Hotels International, Inc. - Class action in Saskatchewan alleging wrongful collection of undisclosed destination marketing fees; class not yet certified; anticipated dismissal pending; (2) Jai Sai Baba, LLC, et al. v. Choice Hotels International, Inc. - Approximately 90 franchisees alleging discriminatory, anti-competitive practices and violations of RICO, Sherman Act, Civil Rights Act, and state franchise laws; case stayed pending individual arbitration as of March 19, 2021; (3) T&T Management, Inc. v. Choice Hotels International, Inc. and Country Inn & Suites by Radisson, Inc. - Licensee alleging breach of license agreement, breach of implied covenant of good faith and fair dealing, and misappropriation of guest data under Defend Trade Secrets Act; filed June 26, 2023; motion to dismiss filed November 6, 2023.
What drove the 53/100 verdict
Risk Score Breakdown
- 01MINOR10 suits but parent-wide (Choice Hotels), not brand-specific
- 02MINORParent-level financials: net worth $181.2M, net income $370M
- 03MINORNegative net growth -14.1%; audited, Item 19
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.