B55/100FDD 2026
SureStay by Best Western — Litigation & Risk
Lodging - Hotels & Motels · FDD Items 3, 4 & 5
Elevated Risk
27 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
27
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
55 / 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
70
Government-backed loans issued
Default rate
4.5%
vs <3% typical · system-wide
5-yr default rate
6.2%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$178.8M
Avg loan size
$2.6M
Participating lenders
26
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
Arizona
State whose law governs disputes — relevant if you're not based there
What drove the 55/100 rating
Risk Score Breakdown
- 01MINORDeclining unit count (-1.8% YoY) indicates system contraction and potential franchisee attrition
- 02MEDNo Item 19 financial performance data disclosed—impossible to validate ROI claims or average unit economics
- 03HIGHHistory of litigation involving both SureStay and parent company Best Western regarding terminations, breach of contract, and membership disputes signals operational/legal instability
- 04MINORWide investment range ($176K–$13.6M) suggests highly variable unit profitability and unclear franchise viability across property types
- 05MINOR4% royalty on gross rooms revenue (not net profit) creates cash flow pressure for low-margin hospitality operations
- 06MINOR15-year term locks franchisees into relationship during period of hotel industry disruption (OTA competition, labor costs, supply chain volatility)
- 07MINORParent company's multiple collection proceedings and membership termination lawsuits indicate systemic friction with franchisees and business partners
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.