December 12, 2025|Franchise Frontlines
December 12, 2025 | United States District Court for the Northern District of Ohio | Slip Opinion
Executive Summary
In Remington Lodging & Hospitality, LLC v. Cleveland Airport Hospitality II, LLC, 2025 WL 3562578 (N.D. Ohio Dec. 12, 2025), Judge Pamela A. Barker addressed whether financial projections attached to hotel management agreements could be treated as binding performance guarantees. Several Ohio hotel owners—three operating under Doubletree franchise agreements with Hilton and one under a Best Western membership agreement—terminated their management agreements with Remington and asserted counterclaims for breach of contract and negligent misrepresentation. The owners argued that Remington guaranteed it would achieve the pro forma financial projections and misrepresented its ability to do so. Remington responded that the agreements provided only a termination right tied to performance thresholds, not an affirmative promise to hit projections, and that any alleged oral guarantees were barred by the integration clause and parol evidence rule. The court agreed in substantial part, dismissing the negligent misrepresentation claim and rejecting the theory that failure to achieve pro forma results constituted a contractual breach, while allowing a narrower claim regarding the parties’ obligation to confer in good faith over budget disputes to proceed.
Relevant Background
The counterclaimants owned four Ohio hotels. Three properties operated under Doubletree franchise agreements with Hilton Franchise Holding LLC, and one operated under a Best Western membership agreement with BWH Hotels. In 2023, the owners entered into substantially identical hotel management agreements (“HMAs”) with Remington.
Each HMA included a five-year financial pro forma attached as “Exhibit E.” The agreements contained a “Termination for Convenience” clause providing that if actual financial performance fell below 92% of the projected GOP in a given year, the owner could terminate upon notice. The clause also stated that the pro formas constituted “a material consideration” for the owner’s consent and deleted a projection disclaimer contained in Exhibit E.
After several months of management, disputes arose. The owners alleged that Remington failed to achieve projected results, submitted annual budgets inconsistent with the pro formas, and conceded it could not “live up” to the projections. They terminated the HMAs and later alleged that management failures contributed to Hilton’s termination or nonrenewal of certain franchise agreements.
Remington sued for unpaid management fees. The hotel owners counterclaimed for negligent misrepresentation and breach of contract, asserting that Remington had guaranteed the pro forma results and breached the HMAs by failing to achieve them.
Decision
Judge Barker began with settled Ohio contract principles. Under Ohio law, courts determine as a matter of law whether contract language is ambiguous, and the parties’ intent is presumed to reside in the language they chose. See Savedoff v. Access Grp., Inc., 524 F.3d 754 (6th Cir. 2008); Alexander v. Buckeye Pipe Line Co., 374 N.E.2d 146 (Ohio 1978). Courts may not use extrinsic evidence to create ambiguity; any ambiguity must be apparent from the face of the contract.
Applying those principles, the court held that the HMAs unambiguously did not contain a promise by Remington to achieve the pro forma results. The agreements did not state that Remington “shall achieve,” “promises,” “warrants,” or “guarantees” the projected financial results.
The court rejected the argument that describing the pro formas as “material consideration” converted the projections into a covenant. The termination clause merely provided a contractual remedy—early termination—if performance fell below 92% of projections. The court explained that providing a termination right tied to projections “is not the same as providing that Remington promises or guarantees to meet the specific financial results set forth in those pro formas.”
The owners also argued that deletion of the disclaimer in Exhibit E demonstrated an intent to create a guarantee. The court disagreed, holding that removal of the disclaimer “does not, standing alone, create an affirmative contractual promise or guarantee.” Instead, the deletion ensured that Remington could not rely on the disclaimer to defeat the owners’ termination rights.
The HMAs contained an integration clause stating that the agreement constituted the entire agreement of the parties and superseded prior understandings. The court agreed that, in light of this clause, allegations that Remington orally “guaranteed” the projections during negotiations would be barred by the parol evidence rule.
The court therefore dismissed the breach of contract claims to the extent they were premised on an alleged obligation to achieve the pro forma results or to submit budgets incorporating those results.
However, the court allowed a narrower breach claim to proceed under Section 5.03(A) of the HMAs, which required the parties to “confer and use good faith to reach a resolution” if the owner rejected the annual business plan. The owners alleged that Remington failed to engage meaningfully in that process before terminating the relationship. Taking the allegations as true at the pleading stage, the court found those allegations sufficient to state a claim.
The court also dismissed the negligent misrepresentation claim. Under Ohio law, negligent misrepresentation requires a false statement of past or existing fact, not promises regarding future conduct. See Delman v. City of Cleveland Heights, 534 N.E.2d 835 (Ohio 1989); GEM Indus., Inc. v. SunTrust Bank, 700 F. Supp. 2d 915 (N.D. Ohio 2010). The court reiterated that “[p]redictions as to future events do not constitute actionable misrepresentations,” quoting Risner v. Regal Marine Indus., Inc., 8 F. Supp. 3d 959 (S.D. Ohio 2014). Because the alleged misrepresentations concerned assurances that Remington “would achieve” projected results, they were promises of future performance rather than statements of existing fact.
Importantly, the opinion turned on the specific language of the HMAs and Ohio contract and tort principles. The franchise agreements appeared in the background as part of the damages narrative, not as a basis for imposing operational liability on the franchisors. The court did not expand franchisor liability standards or alter the doctrinal framework applicable to franchise relationships.
Looking Forward
Although this case arises in the hotel management context, it offers practical lessons for franchisors and branded systems operating through independent operators or managers.
First, performance projections tied to contractual remedies do not automatically become affirmative performance guarantees. When agreements clearly structure projections as benchmarks triggering termination rights, rather than as covenants of guaranteed results, courts may enforce that distinction.
Second, integration clauses remain powerful risk-management tools. Carefully drafted integration language can help prevent post hoc reliance on alleged oral assurances during negotiations.
Third, the decision reinforces the boundary between contract and tort. Courts continue to resist attempts to repackage alleged failures of contractual performance as negligent misrepresentation claims where the statements concern future performance under a written agreement.
Finally, the court’s willingness to allow a narrow “good faith” budget dispute claim to proceed underscores the importance of documenting compliance with contractual dispute-resolution processes. Where agreements require parties to confer and attempt resolution, contemporaneous documentation may prove significant.
As always, outcomes turn on the specific language used and the governing state law. This decision reinforces that careful drafting—particularly around projections, disclaimers, termination triggers, and integration clauses—continues to matter in franchise-adjacent and multi-unit operational contexts.
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 Shareholder 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.
