B57/100FDD 2023
Tru 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
57 / 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
7
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$30.3M
Avg loan size
$4.3M
Participating lenders
6
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 57/100 rating
Risk Score Breakdown
- 01MEDNo average unit volume or net income disclosed in FDD Item 19, preventing ROI validation on $11.6M-$17.2M investment
- 02HIGHSignificant litigation portfolio including DOJ ADA consent decree, resort fee class actions, and trade secret misappropriation indicating operational and legal vulnerabilities
- 03MINORUnprotected territory creates direct competition risk; franchisees can cannibalize each other's RevPAR in same markets
- 04MED5% royalty on gross rooms revenue (not net) means franchisees pay fees even during low-occupancy periods; no performance thresholds disclosed
- 05MINORModest unit growth (9.0% YoY) across 231 locations suggests market saturation or slower-than-expected brand expansion relative to capital requirements
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.