B62/100FDD 2026
Rodeway Inn — Litigation & Risk
Lodging - Hotels & Motels · FDD Items 3, 4 & 5
Elevated Risk
98 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
98
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
62 / 100
FranchiseVerdict composite
Rating
MODERATE
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
71
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
Total loan volume
$119.9M
Avg loan size
$1.7M
Participating lenders
42
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
What drove the 62/100 rating
Risk Score Breakdown
- 01MINORDeclining unit count (-3.4% YoY) indicates system contraction and weakening franchisee profitability
- 02HIGHMultiple pending civil litigation alleging regulatory violations and discrimination suggests operational/compliance issues at corporate level
- 03MEDNo average revenue or net income disclosure (missing Item 19) prevents ROI validation and suggests franchisor may be hiding poor unit economics
- 04MINORUnprotected territory creates direct competition risk; franchisees can cannibalize each other's revenue
- 05HIGHLitigation includes collection actions against former franchisees, indicating cash flow distress among operators
- 06MINOR5% royalty on GRR is reasonable but unsustainable if average unit volumes are below break-even threshold
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.