February 1, 2011
UnhappyFranchisee.com - Franchisees of Choice Hotels International are suing their franchisor, and alleging that the Silver Springs, MD company cost them millions as a result of its “unfair and deceptive acts.”
The class action complaint that Choice Hotels International is charging its franchisees a fee, of up to 5 percent, on room stays by guests who are members of the Choice Privileges rewards program. Choice Hotels franchisees allege that the fee was neither disclosed nor agreed to in their original franchise contracts.
The Choice Privileges rewards program provides member benefits to guests of multiple Choice Hotels brands, including Comfort Inn, Comfort Suites, Quality, Sleep Inn, Econo Lodge, MainStay Suites, Clarion, Cambria Suites, Suburban, and Rodeway Inn
The plaintiff group, which includes Choice Hotel franchise owners in Florida, Louisiana, Missouri and Texas, are seeking $225 million in damages, plus attorneys’ fees and costs.
The lawsuit alleges that:
In essence, Choice has created a group of reward members, the majority of whom are not even aware of that status, and siphoned 5 percent of the gross room sales revenue from the Plaintiff franchisees in relation to the stays by these reward members and without any contractual or other basis to do so… Plaintiffs’ action against Choice also arises from violation of law based on unfair and deceptive conduct by Choice
Choice Hotels International has more than 6,000 hotel franchises worldwide.
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