December 12, 2025|Franchise Frontlines
December 12, 2025 | U.S. District Court for the Western District of Texas | Judge David Briones | Unpublished Opinion
Executive Summary
In an unpublished decision, the Western District of Texas granted in part and denied in part motions to dismiss filed by hotel franchisors, including Wyndham Hotels & Resorts and Choice Hotels International, in a Trafficking Victims Protection Reauthorization Act (“TVPRA”) case. The plaintiff alleged she was trafficked at multiple franchised hotel locations and sought to hold the franchisors liable under both perpetrator and beneficiary theories, as well as vicarious liability. The franchisors argued that the complaint failed to plausibly allege participation in a trafficking venture or sufficient control over franchisee operations. The court rejected those arguments in significant part, finding that detailed allegations regarding centralized operational control, reporting requirements, and system-wide policies were sufficient at the pleading stage to allow the claims to proceed. The decision provides a detailed example of the types of allegations that may be sufficient to bring franchisors into TVPRA litigation.
Relevant Background
The plaintiff alleged that she was trafficked over a six-month period at three hotel properties in Texas operating under national brands affiliated with Wyndham and Choice. According to the complaint, the trafficking activity was ongoing, visible, and accompanied by numerous indicators, including frequent cash payments, extended stays, high foot traffic to rooms, and visible signs of abuse.
The plaintiff asserted that both franchisee staff and franchisor personnel were aware, or should have been aware, of the trafficking activity. She further alleged that the franchisors maintained policies requiring reporting of criminal activity, conducted on-site inspections, and exercised control over various aspects of hotel operations.
The complaint sought to hold the franchisors liable under multiple theories, including direct liability under the TVPRA and vicarious liability based on alleged agency relationships between the franchisors and franchisees.
The franchisors moved to dismiss, arguing that the allegations failed to establish participation in a trafficking venture, knowledge of trafficking, or sufficient control to support vicarious liability.
Decision
The court began by analyzing the plaintiff’s claims under the TVPRA, which provides for both perpetrator liability and beneficiary liability. With respect to perpetrator liability, the court found that the plaintiff plausibly alleged that the hotels “harbored” her by providing rooms used for trafficking and that the allegations supported an inference of coercion. The court further concluded that the plaintiff adequately pleaded knowledge at the motion to dismiss stage, relying on allegations that franchisor policies required reporting of trafficking indicators and that such indicators were visible and persistent.
The court distinguished between two theories of perpetrator liability, dismissing one claim as to Choice while allowing claims against Wyndham to proceed where arguments were not meaningfully addressed. More importantly, the court allowed the plaintiff’s beneficiary liability claims to proceed against both franchisors.
In addressing beneficiary liability, the court focused on whether the plaintiff plausibly alleged that the franchisors participated in a venture that engaged in trafficking. The court rejected arguments that participation requires an overt act directly advancing trafficking, emphasizing that the statutory language does not impose such a requirement. Instead, the court held that allegations of a continuous business relationship, combined with operational involvement, may support an inference of participation.
The court found that the plaintiff’s detailed allegations regarding franchisor involvement were sufficient at this stage. These included assertions that the franchisors controlled reservation systems, pricing, employee training, operational policies, reporting requirements, and compliance inspections, and that they maintained centralized oversight of hotel operations. Taken together, these allegations supported an inference that the franchisors were sufficiently involved in the underlying venture to survive dismissal.
The court also addressed the knowledge element, rejecting the argument that the plaintiff must show knowledge of a specific victim. Instead, the court held that allegations that the franchisors knew or should have known of trafficking activity generally—based on industry awareness, internal policies, and observed indicators—were sufficient to satisfy the pleading standard.
Finally, the court allowed the plaintiff’s vicarious liability claims to proceed based on an agency theory. The court emphasized that the relevant inquiry is whether the franchisor exercised control over the day-to-day operations of the franchisee as they relate to the alleged harm. The court rejected the argument that franchisor control required under trademark law precludes liability, concluding that allegations of operational control tied to the alleged misconduct were sufficient to proceed.
Looking Forward
This decision provides a detailed illustration of how franchisors may be drawn into TVPRA litigation based on allegations of operational control and system-wide practices. While the court did not resolve the merits of the claims, it identified a set of allegations that, if proven, may support liability beyond the franchisee level.
For franchisors, the opinion highlights the importance of how system standards, training protocols, and compliance mechanisms are structured and implemented. The court’s analysis suggests that plaintiffs may attempt to characterize centralized systems—such as reservation platforms, reporting requirements, and operational oversight—as evidence of participation in a broader enterprise.
At the same time, the decision underscores that the inquiry is fact-specific and tied to the relationship between the alleged control and the underlying harm. The court did not hold that franchisors are liable based on ordinary brand standards alone. Instead, it focused on allegations that linked operational control to the conditions under which trafficking allegedly occurred.
The court’s treatment of the knowledge requirement is also notable. By allowing claims to proceed based on generalized knowledge of trafficking risks and observable indicators, the decision reinforces a trend in which plaintiffs rely on industry-wide awareness and internal policies to satisfy pleading standards. Whether such allegations can ultimately be substantiated remains an issue for later stages of litigation.
Taken together, the decision reflects the continued development of TVPRA litigation against franchisors and the increasing focus on system-level operations. For franchisors, it reinforces the importance of aligning operational practices with clearly defined roles and responsibilities and ensuring that compliance frameworks are both effective and consistently implemented across the system.
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.
