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D72/100FDD 2026

Super 8 — Litigation & Risk

Lodging - Hotels & Motels · FDD Items 3, 4 & 5

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Elevated Risk

16 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
16
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
72 / 100
FranchiseVerdict composite
Rating
CAUTION
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
744
Government-backed loans issued
Default rate
9.4%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
64 loans
Loans charged off or defaulted
Total loan volume
$941.9M
Avg loan size
$1.3M
Participating lenders
183

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
New Jersey
State whose law governs disputes — relevant if you're not based there

What drove the 72/100 rating

Risk Score Breakdown

  1. 01MINORDeclining unit count (-2.3% YoY) signals shrinking franchise system and potential market saturation or franchisee dissatisfaction
  2. 02HIGHMultiple active litigations including antitrust/price-fixing allegations (Benoit, Jantunen, Proulx) and fee calculation disputes (Janani) suggest systemic franchisor-franchisee conflicts and potential operational cost increases
  3. 03MEDNo Item 19 financial disclosure (Avg Revenue/Net Income not disclosed) prevents independent ROI validation and suggests performance data may be weak or inconsistent across portfolio
  4. 04MEDHigh-end investment range ($7.1M+) combined with undisclosed profitability creates severe information asymmetry and liquidity risk
  5. 05HIGHResort fee and revenue management litigation (Luca, Extended Stay Antitrust cases) indicate regulatory/legal exposure that may impact pricing power and franchisee margins
  6. 06MINORFTC cybersecurity settlement demonstrates prior compliance failures and data security vulnerabilities that could expose franchisees to liability
  7. 07MINOR20-year term with 5.5% royalty on gross room revenue (not profit) locks franchisees into long-term fee obligation regardless of profitability

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.