B59/100FDD 2025
stayAPT Suites — Litigation & Risk
Lodging - Hotels & Motels · FDD Items 3, 4 & 5
Lower Risk
No litigation cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
59 / 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
2
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$3.8M
Avg loan size
$1.9M
Participating lenders
1
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
Non-compete
0.5 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
North Carolina
State whose law governs disputes — relevant if you're not based there
What drove the 59/100 rating
Risk Score Breakdown
- 01MINORMassive unit growth (350% YoY) suggests either aggressive expansion into immature market or unsustainable recruiting; 32 units is still very small system
- 02MINORNo average unit volume (AUV) or net income disclosure in FDD Item 19 — impossible to validate ROI claims or unit economics
- 03MINORHigh capital requirement ($7.5M–$12.9M) combined with opaque profitability creates significant financial risk for franchisees
- 04MINORRoyalty structure (greater of $2,500/month floor or 5% of gross) means minimum $30K annual payment regardless of profitability
- 05MEDExtended 20-year term locks franchisees into long-term commitment with brand that has minimal track record and undisclosed financial performance
- 06MINORHypergrowth trajectory (350% YoY) in extended-stay hotel segment suggests potential market saturation or recruitment-driven growth model rather than organic unit success
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.