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Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns logo
BAbove average53/100FDD 2024

Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns: Litigation & Risk

Lodging · FDD Items 3, 4 & 5

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Elevated Risk

8 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
8
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
70
Government-backed loans issued
Charge-off rate
16.7%
vs 16% franchise average
5-yr charge-off rate
N/A
Defaults
7 loans
Loans charged off or defaulted
Total loan volume
$68.0M
Avg loan size
$972K
Participating lenders
47

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
Georgia
State whose law governs disputes. Relevant if you're not based there

Extracted from FDD Item 3

Litigation Detail

1 case reference(s): 0 pending, 1 settled.

What drove the 53/100 verdict

Risk Score Breakdown

  1. 01MINOR7 franchisor-initiated suits (2021-2023) across 203 units
  2. 02MINOROld 1981 SEC enforcement action against affiliate (low weight, pre-dates ownership)
  3. 03MINORNo Item 19 disclosure; net unit growth -8.6%

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.