What specific franchise business practices are alleged to be unlawful or improper in the lawsuits against Holiday Hospitality Franchising, LLC, and how might these practices relate to Atwell Suites?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 3 — Litigation (FDD pages 15–27)
What This Means (2025 FDD)
According to Atwell Suites' 2025 Franchise Disclosure Document, several lawsuits allege unlawful or improper franchise business practices against Holiday Hospitality Franchising, LLC (Holiday). These lawsuits, particularly the class action lawsuits, claim that Holiday imposed unreasonable requirements for products and services on its franchisees and received improper kickbacks from required purchases.
These allegations are significant for prospective Atwell Suites franchisees because Atwell Suites is under the umbrella of InterContinental Hotels Group (IHG), the parent company of Holiday. If Holiday, as part of IHG, has been accused of imposing unreasonable requirements and taking kickbacks, there is a potential risk that similar practices could be implemented within the Atwell Suites franchise system. This could affect franchisees' operational costs and profitability if they are compelled to purchase specific products or services from designated suppliers under unfavorable terms.
It is important to note that these are allegations, and the outcomes of the lawsuits vary. Some cases were dismissed, some were settled with payments made by Holiday or the franchisees, and some are still pending. However, the existence of these lawsuits suggests a pattern of disputes between Holiday and its franchisees regarding business practices. Prospective Atwell Suites franchisees should carefully review Item 3 of the FDD, conduct thorough due diligence, and seek legal counsel to understand the potential risks associated with these types of franchise business practices within the IHG network. They should also inquire about the specific purchasing requirements and supplier relationships within the Atwell Suites system to assess the likelihood of similar issues arising.