B63/100FDD 2023
Tapestry Collection by Hilton — Litigation & Risk
Lodging - Hotels & Motels · FDD Items 3, 4 & 5
Elevated Risk
8 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
8
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
63 / 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
$5.7M
Avg loan size
$2.8M
Participating lenders
2
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 York
State whose law governs disputes — relevant if you're not based there
What drove the 63/100 rating
Risk Score Breakdown
- 01HIGHActive litigation regarding mandatory guest fees and breach of contract claims signal operational/disclosure compliance issues
- 02MINORNo revenue or net income disclosure (Item 19) prevents ROI validation for a $3.3M+ investment
- 03MINORPrior DOJ consent decree on ADA compliance and settled breach of contract claims with former franchisees indicate franchisor relationship problems
- 04MINORUnprotected territory creates direct competition risk within same brand system
- 05MED23-year term is exceptionally long with limited exit flexibility in hospitality sector
- 06MINORRapid 23.8% YoY growth may indicate over-expansion that strains support systems or saturates markets
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.