What are the primary allegations made by the plaintiffs in the amended petition against Holiday Hospitality Franchising, LLC, in the context of Even Hotels?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
Plaintiffs are the licensee and guarantor with respect to a former Holiday Inn® & Suites branded hotel. Plaintiffs filed their initial petition for declaratory judgment on October 31, 2023 and an amended petition on December 7, 2023. The plaintiffs ceased operating the hotel as a Holiday Inn® & Suites branded hotel and de-identified the hotel without Holiday's permission long before the October 15, 2041 expiration date of the license agreement. The amended petition alleges that Holiday made certain misrepresentations to plaintiffs in advance of the execution of the license agreement but asserted no claim for damages. The amended petition seeks a declaratory judgment finding that Holiday's license agreement is unconscionable and unenforceable, that the liquidated damages clause is an unenforceable penalty, and that the defendants are not liable to Holiday for ceasing to operate the hotel as a Holiday Inn® & Suites and de-identifying the hotel. On February 2, 2024, Holiday filed an answer and counterclaims against the plaintiffs, asserting claims for breach of the license agreement and associated guaranty related to licensee's ceasing operating the hotel as a Holiday Inn® & Suites branded hotel and deidentifying the hotel long before its scheduled expiration date. Holiday's
Source: Item 3 — LITIGATION (FDD pages 15–26)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, an amended petition was filed against Holiday Hospitality Franchising, LLC, by Atlanta Hospitality Investment, LLC, and Mohammad Sarower Hossain. The lawsuit relates to a former Holiday Inn® & Suites branded hotel. The plaintiffs, who were the licensee and guarantor, ceased operating the hotel under the Holiday Inn® & Suites brand and de-identified it without Holiday's permission before the license agreement's expiration date.
The amended petition alleges that Holiday made certain misrepresentations to the plaintiffs before the license agreement was executed. However, the petition did not assert a claim for damages. Instead, the plaintiffs sought a declaratory judgment.
The declaratory judgment requested the court to find that Holiday's license agreement was unconscionable and unenforceable, and that the liquidated damages clause was an unenforceable penalty. The plaintiffs also sought a judgment declaring that they were not liable to Holiday for ceasing to operate the hotel as a Holiday Inn® & Suites and for de-identifying the hotel. Holiday filed counterclaims against the plaintiffs for breach of the license agreement and associated guaranty.