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F85/100FDD 2024

Vignette Collection — Litigation & Risk

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

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Elevated Risk

60 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
60
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
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Georgia
State whose law governs disputes — relevant if you're not based there

What drove the 85/100 rating

Risk Score Breakdown

  1. 01MEDMassive initial investment ($17.4M) with zero disclosed average revenue or net income — impossible to calculate ROI or validate profitability claims
  2. 02HIGHGoing concern status is FALSE, indicating potential solvency/operational continuity issues at franchisor level
  3. 03HIGHHigh-volume litigation involving franchisor (Holiday) and parent (IHG/SCH) with multiple breach of contract, unpaid fees, and improper business practice claims suggesting systemic disputes
  4. 04MINOROnly 1 operating unit with unknown growth trajectory — system appears non-existent or collapsed, indicating franchisee is essentially a guinea pig
  5. 05MINORNo territory protection despite massive capital commitment — franchisee faces direct cannibalization risk
  6. 06MINOR5% royalty on gross rooms revenue creates exposure to franchisor's aggressive enforcement; class actions reference vendor kickbacks suggesting hidden revenue drains
  7. 07HIGH20-year term locks franchisee into potentially deteriorating brand relationship with litigation-prone franchisor

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.