April 27, 2026|Franchise Frontlines
April 27, 2026 | United States District Court for the District of New Jersey | Not for Publication
Executive Summary
In a not-for-publication opinion, Judge Esther Salas of the United States District Court for the District of New Jersey granted in part and denied in part franchisee Independent Lodging Company’s motion to dismiss in a TVPRA case involving alleged sex trafficking at Wyndham-branded hotels in Missouri. Plaintiff asserted claims against Wyndham Hotels & Resorts, Inc., Super 8 Worldwide, Inc., Wyndham Hotel Group, LLC, and two hotel franchisees, alleging that she was trafficked at a Travelodge and Super 8 and that defendants were liable under the Trafficking Victims Protection Reauthorization Act. Independent Lodging argued that the New Jersey court lacked personal jurisdiction over it because it was a Missouri company, the relevant hotel was located in Missouri, and the alleged trafficking occurred in Missouri. Plaintiff argued that Independent Lodging purposefully directed activities at New Jersey through its franchise relationship with the Wyndham defendants. The court held that Independent Lodging purposefully availed itself of New Jersey by entering into an ongoing franchise relationship with New Jersey-based franchisor defendants, but that plaintiff’s claims did not sufficiently arise out of or relate to those New Jersey contacts because the core alleged trafficking conduct occurred in Missouri. Rather than dismissing the claims against Independent Lodging or splitting the case, the court transferred the entire action to the United States District Court for the Western District of Missouri and expressly declined to reach the Wyndham defendants’ Rule 12(b)(6) merits motion.
Relevant Background
Plaintiff alleged that she was sex trafficked between June 2015 and December 2015 at a Travelodge hotel and a Super 8 hotel, both located in Missouri. She alleged that obvious signs of trafficking existed at the hotels, including prepaid room payments, daily extensions of the stay, constant “do not disturb” signs, repeated short visits by multiple non-guest men, few personal belongings, failure by traffickers to provide identification to hotel staff, and loitering on site.
The complaint alleged that Shri Hari Investments LLC owned, operated, and managed the Travelodge through the Wyndham defendants’ franchising system. It also alleged that Independent Lodging owned, operated, and managed the Super 8 through the Wyndham defendants’ system. Plaintiff asserted that the relationship between sex trafficking and the hotel industry was widely known and that Wyndham’s public statements showed awareness that sex trafficking was a problem at hotels. Plaintiff further alleged that the Wyndham defendants monitored criminal activity at branded hotels and were aware of activity indicating sex trafficking or related crimes at those hotels.
Plaintiff brought three TVPRA theories. Count I alleged that the franchisees were liable as perpetrators under Section 1595(a). Count II alleged that all defendants were liable as beneficiaries for financial benefits allegedly derived from participation in a venture that violated the TVPRA. Count III alleged that the Wyndham defendants were vicariously liable for the acts of the franchisees and their alleged subagents.
Independent Lodging moved to dismiss for lack of personal jurisdiction and improper venue. The Wyndham defendants separately moved to dismiss for failure to state a claim. Shri Hari did not move to dismiss and instead answered the complaint. The court addressed Independent Lodging’s jurisdictional motion and did not reach the Wyndham defendants’ merits arguments.
Decision
The court first addressed general jurisdiction. Independent Lodging was incorporated in Missouri and had its principal place of business in Kansas. The court held that Independent Lodging was “at home” in Missouri and Kansas, not New Jersey. Plaintiff conceded that general jurisdiction did not exist, and the court found no exceptional facts that would make Independent Lodging subject to general jurisdiction in New Jersey.
The court then turned to specific jurisdiction. Under the governing framework, the court asked whether Independent Lodging purposefully directed activities at New Jersey, whether plaintiff’s claims arose out of or related to those New Jersey-directed activities, and whether exercising jurisdiction would comport with fair play and substantial justice.
On purposeful availment, the court found that Independent Lodging had purposefully availed itself of New Jersey through its franchise relationship with the Wyndham defendants. Relying on Burger King Corp. v. Rudzewicz, the court reasoned that a nonresident franchisee can create minimum contacts with a forum by entering into a long-term franchise relationship with a franchisor connected to that forum and assuming ongoing obligations tied to that relationship. The court analogized Independent Lodging’s relationship with the New Jersey-based Wyndham defendants to that principle, noting that the franchise relationship required ongoing operational coordination.
That finding did not end the analysis. The court held that plaintiff failed to satisfy the relatedness prong of specific jurisdiction. The court relied on related Wyndham TVPRA decisions from the District of New Jersey, including Doe (S.A.T.) v. Wyndham Hotels & Resorts, Inc. and Doe (M.J.J.) v. Wyndham Hotels & Resorts, Inc. In those cases, courts held that although franchisees may have ongoing business relationships with Wyndham and may use Wyndham systems, the alleged trafficking conduct occurred outside New Jersey. The relationship between the franchisee’s New Jersey contacts and the plaintiff’s trafficking claims was too attenuated to support specific jurisdiction.
The court applied that reasoning here. It found that the conduct at the core of plaintiff’s claims occurred outside New Jersey. The alleged trafficking occurred in Missouri, at Missouri hotels. Although Independent Lodging may have had routine interactions with a New Jersey-based franchisor, those franchise-system contacts did not create the required strong connection between New Jersey and the trafficking claims. The court emphasized that jurisdiction must rest on each defendant’s own contacts with the forum and that generalized allegations about franchisor policies, payment systems, or nationwide operations did not establish the required nexus for personal jurisdiction over the franchisee.
Because plaintiff failed to satisfy the relatedness requirement, the court held that it lacked personal jurisdiction over Independent Lodging. It therefore did not need to decide whether exercising jurisdiction would otherwise comport with fair play and substantial justice.
The court then considered what to do with the case. Rather than dismissing Independent Lodging or leaving the claims divided between jurisdictions, the court considered transfer. The court noted that when a district court lacks personal jurisdiction, it must at least consider transfer. It then analyzed transfer under 28 U.S.C. § 1404(a), finding venue proper in New Jersey but concluding that the Western District of Missouri was the more appropriate forum for the entire case.
The court found that plaintiff could have brought the action in the Western District of Missouri because a substantial part of the events giving rise to the claims occurred there. Both hotels at issue were located in that district. The court also found that the relevant public and private interest factors favored transfer. Plaintiff lived in Missouri, Independent Lodging was a Missouri company with a principal place of business in Kansas, the hotels were in Missouri, most of the alleged underlying conduct occurred there, and witnesses and evidence concerning the alleged trafficking were likely located there.
Judicial economy also favored transfer. The court reasoned that transferring the entire case would avoid splitting plaintiff’s claims between two forums. The court cited other TVPRA cases transferring hotel-franchise litigation to forums where personal jurisdiction existed over key property-level defendants and where the alleged trafficking occurred. The court also recognized the purposes of the TVPRA, including combatting trafficking, punishing traffickers, and protecting victims, while concluding that those objectives supported transfer rather than fragmented litigation.
The court therefore transferred the entire case to the United States District Court for the Western District of Missouri. Because of the transfer, the court declined to address the Wyndham defendants’ motion to dismiss under Rule 12(b)(6). The Wyndham defendants were left free to refile that motion after transfer at the direction of the Missouri court.
Looking Forward
This decision is useful for hotel franchisors, franchisees, and other national brand systems defending TVPRA claims because it separates two concepts that plaintiffs often try to merge: the existence of a franchise relationship with a forum-connected franchisor and personal jurisdiction over a property-level franchisee for alleged conduct that occurred elsewhere. The court accepted that Independent Lodging purposefully availed itself of New Jersey through its franchise relationship with New Jersey-based Wyndham defendants. But the court still required a claim-specific connection between those New Jersey contacts and the alleged trafficking at issue.
That distinction matters. A franchisee’s ongoing relationship with a franchisor may create some forum contacts, especially where the relationship involves operational reporting, payment obligations, system access, brand standards, or communication with the franchisor’s headquarters. But this decision confirms that those contacts may not be enough where the operative facts occurred at a hotel in another state and the plaintiff’s injury arises from alleged property-level conduct. Courts may ask whether the franchise relationship merely provides background to the dispute or whether the forum-based contacts actually relate to the conduct giving rise to the claim.
For franchisors, the decision also illustrates the value of keeping jurisdictional and merits arguments separate. The court did not decide whether plaintiff adequately pleaded TVPRA beneficiary liability or vicarious liability against the Wyndham defendants. It did not decide whether Wyndham’s policies, training, reporting systems, monitoring practices, or franchise controls were sufficient to support liability. It decided only that the New Jersey court lacked personal jurisdiction over Independent Lodging and that the case should proceed in Missouri. That limitation should be preserved in any later discussion of the case.
For franchisees, the ruling provides a useful jurisdictional defense framework. A property-level franchisee sued in the franchisor’s home forum should evaluate whether the plaintiff can satisfy the relatedness prong of specific jurisdiction. If the alleged conduct occurred entirely at the franchisee’s out-of-state location, and if the plaintiff relies primarily on ordinary franchise-system contacts with the franchisor’s home state, the franchisee may have a credible argument that jurisdiction is lacking. The strongest version of that argument focuses on the location of the alleged injury, the property-level personnel, the operational facts, witnesses, documents, and the absence of forum-based conduct by the franchisee giving rise to the claim.
At the same time, the decision is not a broad rejection of TVPRA claims against hotel brands or franchisees. Transfer is not dismissal on the merits. The court kept the case together and sent it to the Western District of Missouri, where the alleged trafficking occurred and where the court expected jurisdictional and practical connections to be stronger. Franchisors and franchisees should treat the decision as a procedural roadmap, not as a substantive ruling on TVPRA exposure.
The transfer analysis is also significant. The court could have dismissed the claims against Independent Lodging and allowed the claims against other defendants to proceed separately. Instead, it transferred the entire case to avoid fragmented litigation. That approach may help franchisors and franchisees in multi-defendant TVPRA cases by keeping the brand-level and property-level allegations in one forum, particularly where the transferee forum is closer to the witnesses, records, hotel operations, and alleged events.
The opinion also reinforces a practical point for national hotel systems: franchise-system contacts can serve different purposes in different procedural contexts. The court found those contacts sufficient for purposeful availment but insufficient for relatedness. That split conclusion means franchisors and franchisees should expect plaintiffs to continue relying on franchise agreements, operational reporting, revenue sharing, brand standards, anti-trafficking policies, and monitoring systems to support jurisdiction and liability theories. The defense response should be precise. Ordinary franchise-system obligations may show a business relationship, but they do not necessarily show that a forum has jurisdiction over claims arising from alleged conduct at a distant property.
For franchisors, this case also supports careful drafting and documentation around the division of responsibilities between brand and property-level operators. Anti-trafficking policies, training, reporting obligations, and compliance programs remain important. But agreements and operational materials should avoid unnecessary language suggesting that the franchisor directly controls local staffing, day-to-day guest interactions, room rentals, surveillance practices, or property-level security decisions. Clear allocation of operational responsibilities may help both on jurisdictional questions and on later merits defenses.
Finally, the ruling demonstrates why venue strategy matters in TVPRA franchise litigation. Plaintiffs may file in the franchisor’s home forum to capture brand-level defendants and systemwide allegations. Franchisees may seek dismissal or transfer when the alleged conduct occurred elsewhere. Franchisors may prefer a unified forum to avoid inconsistent rulings, duplicative discovery, and fractured defenses. The best procedural strategy will depend on the defendants, the property location, the alleged conduct, and the relationship between franchisor policies and property-level events.
Taken together, Doe v. Wyndham Hotels & Resorts is a useful procedural decision for franchise systems facing TVPRA litigation. It recognizes that a franchise relationship may create forum contacts, but it still requires a strong connection between those contacts and the plaintiff’s specific claims. For hotel franchisors and franchisees, the decision underscores the importance of precise jurisdictional arguments, careful forum strategy, and disciplined separation between franchise-system relationships and property-level conduct.
This article is based solely on the opinion of the Court in this matter. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Court’s opinion in this case.
Thomas O’Connell is a Partner at Buchalter LLP and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
