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F84/100FDD 2023

Tempo by Hilton — Litigation & Risk

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

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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
84 / 100
FranchiseVerdict composite
Rating
AVOID
STRONG / MODERATE / CAUTION / AVOID

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
Non-compete
3 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
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 84/100 rating

Risk Score Breakdown

  1. 01MINORZero operating units with unknown growth trajectory indicates brand has not successfully launched or is in collapse phase
  2. 02HIGHPending consumer protection litigation regarding fee disclosures suggests regulatory scrutiny and potential franchisor transparency issues
  3. 03MINORNo average revenue or net income disclosure (Item 19) prevents prospective franchisees from validating investment returns
  4. 04HIGHGoing concern status is FALSE, indicating financial instability at franchisor level
  5. 05HIGHHistory of breach of contract litigation over terminations suggests adversarial franchisor-franchisee relationships
  6. 06MINORADA compliance consent decrees demonstrate operational/legal compliance failures
  7. 07HIGHMisappropriation of trade secrets litigation raises questions about brand integrity and IP protection
  8. 08MINOR22-year term with zero territory protection creates long-term commitment risk with no market exclusivity
  9. 09MED$20.3M investment range with 5% royalty on undisclosed revenues creates profitability uncertainty
  10. 10MINORBrand appears pre-launch or abandoned with zero franchisees, making performance validation impossible

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.