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AStrongest tier59/100FDD 2026

Surestay: Litigation & Risk

Lodging · FDD Items 3, 4 & 5

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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)
None
Franchisor or officer bankruptcy
Verdict score
59 / 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
58
Government-backed loans issued
Charge-off rate
4.5%
vs 16% franchise average
5-yr charge-off rate
0.0%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$158.2M
Avg loan size
$2.7M
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
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

Extracted from FDD Item 3

Litigation Detail

Item 3 discloses 2 concluded cases involving SureStay directly (franchisee suits for wrongful termination, settled for $125,000 and $165,000) and numerous cases involving parent Best Western International, including franchisee/member counterclaims for wrongful termination and breach of contract, several state regulatory consent orders/settlements for unregistered franchise/membership offerings (California $500,000, Maryland $297,000 penalty, Virginia, Washington), and multiple 2025 fee-collection suits BWI initiated against terminated members.

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.