A66/100FDD 2024

Sleep Inn: Litigation & Risk

Lodging · FDD Items 3, 4 & 5

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Elevated Risk

92 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed: 92; Total from FDD Items 3 and 4

Bankruptcy (Item 4): None; Franchisor or officer bankruptcy

Verdict score: 66 / 100; FranchiseVerdict composite · higher is better

Rating: A; 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: 207; Government-backed loans issued

Charge-off rate: 3.4%; vs 16% franchise average

5-yr charge-off rate: 0.0%

Defaults: 4 loans; Loans charged off or defaulted

Total loan volume: $551.3M

Avg loan size: $2.7M

Participating lenders: 97

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

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

What drove the 66/100 verdict

Risk Score Breakdown

01MINOR3 pending matters incl. RICO/antitrust and class action
02MINORVery strong financials (net income $258,507,000)
03HIGHActive (not concluded) litigation
04MEDLarge 427-unit system, audited, Item 19 disclosed

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.