Explanation

This specific risk was not identified in the FDD package. The data in Item 20 indicates the system is stagnant or growing very slowly in the U.S., rather than expanding rapidly. While slow growth presents its own set of risks, such as lack of brand recognition, the particular challenges associated with a franchisor's support systems being overwhelmed by rapid expansion do not appear to be present here. You should evaluate the implications of slow growth on brand value.

Potential Mitigations

• A business advisor can help you analyze the franchise's growth trajectory shown in Item 20 to understand its market position.
• Discuss the franchisor's growth strategy and plans for brand development with them directly.
• Consulting with your accountant can help you project the financial impact of operating within a small or slow-growing brand.

Explanation

This specific risk was not identified in the FDD package. The TRYP by Wyndham brand operates in the hotel industry, which is a well-established business sector rather than one based on a current fad or trend. The concept of offering guest lodging has long-term, sustained consumer demand. Therefore, the risk of the business model becoming obsolete due to shifting consumer interests is low compared to trend-based franchise concepts.

Potential Mitigations

• Your business advisor can help you assess the long-term stability of the hotel industry in your specific market.
• Review the franchisor's plans for system updates and modernizations in Item 11 to understand how they adapt to evolving guest expectations.
• An accountant can help you model financial performance based on the established nature of the hotel business.

Explanation

This risk was not identified in the FDD package. Item 2 details the business experience of the franchisor's directors and principal officers. The executive team, largely comprised of leadership from the parent company Wyndham Hotels & Resorts, demonstrates extensive and long-term experience in the hotel and franchising industries. This depth of experience suggests the management team is well-equipped to manage a franchise system, which is a positive factor for prospective franchisees.

Potential Mitigations

• A business advisor can help you review the biographies in Item 2 to confirm the management team's extensive experience in the lodging and franchise sectors.
• It is still valuable to discuss the support and strategic direction with current franchisees to see how this experience translates into practice.
• In discussions with the franchisor, you could inquire how the parent company's leadership experience is specifically leveraged to support a smaller brand like TRYP.

Explanation

This specific risk was not identified in the FDD package. While the franchisor is part of the larger Wyndham Hotels & Resorts public company structure, it is not owned by a private equity firm. The risks specifically associated with private equity ownership, such as a focus on short-term returns or a quick resale of the brand, do not appear to be present here. The franchisor's ownership structure is that of a traditional publicly-traded corporation in the hospitality industry.

Potential Mitigations

• Your business advisor can confirm the corporate structure and public ownership of the parent company, Wyndham Hotels & Resorts, Inc.
• It is still wise to ask your attorney to review any assignment clauses in the franchise agreement to understand how a future sale of the company could affect you.
• Reviewing the parent company's public financial reports with an accountant can provide insight into its long-term strategic priorities.

Explanation

This risk was not identified in the FDD package. Item 1 clearly identifies TRYP Hotels Worldwide, Inc.'s parent companies, including the ultimate parent and guarantor, Wyndham Hotels & Resorts, Inc. (WHR). Furthermore, the FDD includes the full audited financial statements for WHR in Exhibit D, along with a copy of its performance guarantee. This level of disclosure provides the necessary information to evaluate the financial strength and backing of the franchise system.

Potential Mitigations

• Your accountant should review the parent company's financial statements provided in Exhibit D to assess its financial health.
• Have your attorney examine the parent company guarantee to understand its terms and enforceability.
• It is still beneficial to confirm with a business advisor that the provided information gives a complete picture of the corporate structure.

Explanation

This specific risk was not identified in the FDD package. Item 1 discloses that the TRYP brand was acquired from its Predecessor, Sol Meliá S.A., in 2010. The FDD provides information about the Predecessor's business and its continuing role as a licensee in certain regions. There is no indication that negative history related to litigation, bankruptcy, or franchisee turnover under the predecessor has been obscured or omitted. The disclosure appears to properly describe the system's lineage.

Potential Mitigations

• Your attorney can review the predecessor information in Item 1 to ensure it appears complete and compliant with disclosure rules.
• While not strictly necessary based on the disclosure, a business advisor could assist with researching the predecessor's public reputation for additional context.
• You can ask the franchisor about the transition from the predecessor and how it has impacted the system.