A52/100FDD 2026
WoodSpring Suites — Litigation & Risk
Lodging - Hotels & Motels · FDD Items 3, 4 & 5
Elevated Risk
138 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
138
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
52 / 100
FranchiseVerdict composite
Rating
STRONG
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
11
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
$33.3M
Avg loan size
$3.0M
Participating lenders
3
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
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
Maryland
State whose law governs disputes — relevant if you're not based there
What drove the 52/100 rating
Risk Score Breakdown
- 01HIGHAggressive litigation portfolio including class actions, breach of contract suits, and 124 royalty collection actions in one year indicating systemic franchisor-franchisee conflict
- 02MINORUnprotected territory with no exclusivity despite $8.8M-$14.6M investment, creating direct competition risk from same-brand properties
- 03MINORHigh capital requirement ($8.8M-$14.6M) against modest average net income ($1.16M) yields marginal ROI of ~13% before debt service, taxes, and contingencies
- 04HIGHLitigation disclosure reveals pattern of discriminatory practice allegations and destination marketing fee disputes suggesting franchisor governance issues
- 05MINOR124 collection actions by franchisor in single fiscal year signals widespread franchisee financial distress and payment default problems
- 06HIGH10.9% YoY unit growth masks potential underlying profitability issues given litigation severity and collection action volume
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.