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F85/100FDD 2026

Undergraduate by Hilton — Litigation & Risk

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

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Elevated Risk

15 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
15
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
85 / 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
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 85/100 rating

Risk Score Breakdown

  1. 01HIGHGoing concern status is FALSE — indicates potential solvency/viability crisis at franchisor level
  2. 02MINORZero operating units with unknown growth trajectory suggests brand has not launched or has failed to attract franchisees
  3. 03HIGHFive pending litigation actions including class action antitrust suit creates systemic legal and reputational risk
  4. 04MINORPrior settlements with Texas and Nebraska over mandatory fee disclosure suggests regulatory compliance issues and consumer trust problems
  5. 05MINORFranchisor initiated four collection suits in 2025 — indicates franchisee default/payment failures and cash flow stress
  6. 06MEDNo average revenue or net income disclosure (missing Item 19) prevents ROI validation and suggests poor unit economics
  7. 07MINORUnprotected territory creates direct cannibalization risk and eliminates competitive moat
  8. 08MINORExtremely wide investment range ($10.6M–$36.6M) with no unit count indicates undefined business model and unclear capital requirements
  9. 09MINOR22-year term locks franchisees into relationship with financially distressed franchisor
  10. 10MINORHilton brand extension into budget segment may signal market weakness or strategic pivot under duress

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.