What were the primary allegations in the class action lawsuits against Holiday Hospitality Franchising, LLC that could indirectly affect Atwell Suites franchisees?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Continental Hotels Group, Case No. 25-10068 (11th Cir. Jan. 6, 2025).
Holiday, SCH, and the IHG Owner's Association were named defendants in seven class action lawsuits filed in 2021 by putative classes of Holiday licensees in Connecticut, Louisiana, New Jersey, New Mexico, Ohio, Pennsylvania and Texas. Each of the lawsuits allege that Holiday and SCH engages in unlawful and otherwise improper franchise business practices, including, imposing unreasonable products, services and requirements and receiving improper kickbacks from required purchases.
Specifically, the lawsuits assert causes of action including breach of contract, breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, declaratory judgment, violation of the Sherman Act, and a demand for an accounting. The New Jersey and Pennsylvania class action lawsuits have since been dismissed. Neither Holiday nor SCH paid any amounts in connection with the dismissal of these class action lawsuits. The five lawsuits that remain are:
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- Park 80 Hotels LLC, a Louisiana limited liability company, PL Hotels, LLC, a Louisiana limited liability company, individually, and on behalf of a class of similarly situated individuals and entities v. Holiday Hospitality Franchising, LLC, Six Continents Hotels, Inc.
Source: Item 3 — Litigation (FDD pages 15–27)
What This Means (2025 FDD)
According to Atwell Suites' 2025 Franchise Disclosure Document, Holiday Hospitality Franchising, LLC (Holiday) and Six Continents Hotels, Inc. (SCH) were named as defendants in seven class action lawsuits filed in 2021. These lawsuits were initiated by putative classes of Holiday licensees across multiple states, including Connecticut, Louisiana, New Jersey, New Mexico, Ohio, Pennsylvania, and Texas. The central allegation in these lawsuits is that Holiday and SCH engaged in unlawful and improper franchise business practices. These practices specifically include imposing unreasonable requirements for products and services on franchisees and receiving improper kickbacks from required purchases.
Although the New Jersey and Pennsylvania class action lawsuits have since been dismissed without any payment from Holiday or SCH, five lawsuits remain ongoing. These lawsuits assert causes of action including breach of contract, breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, declaratory judgment, violation of the Sherman Act, and a demand for an accounting. The remaining lawsuits are located in Louisiana and Connecticut.
For a prospective Atwell Suites franchisee, these lawsuits against Holiday Hospitality Franchising, LLC, the parent company of Atwell Suites, highlight potential risks related to franchisor business practices. While Atwell Suites is a newer brand, the parent company's history of litigation over franchise practices could indicate areas of concern. It would be prudent for potential franchisees to investigate the specific requirements for products and services, as well as any potential kickbacks received by the franchisor, to ensure compliance and fair business practices within the Atwell Suites franchise system. Understanding these potential issues can help franchisees make informed decisions and protect their investment.