November 25, 2025|Franchise Frontlines
November 25, 2025 | U.S. District Courts for the Eastern District of Louisiana and District of Maryland | Unpublished Opinions
Executive Summary
Two federal courts issued same-day rulings involving similar allegations against Choice Hotels International under the Trafficking Victims Protection Reauthorization Act. According to the opinions, two different plaintiffs alleged that traffickers exploited them at separate, independently owned Choice-branded hotels during 2013 and 2014. Each complaint asserted theories of beneficiary liability and vicarious liability against the franchisor. In the Louisiana action, the court dismissed the beneficiary-liability claim but allowed the vicarious-liability claim to proceed. In the Maryland case, the court transferred the matter to Alabama, noting that several nearly identical TVPRA actions against Choice had recently been transferred for similar reasons. When viewed together, these rulings continue to illustrate the emergence of a coordinated, nationwide TVPRA litigation wave targeting franchisors, reminiscent in its pace and pattern of the joint-employer campaigns that reshaped the franchise landscape in the mid-2010s.
Relevant Background
According to the Louisiana complaint, the plaintiff alleged that traffickers exploited her at a Sleep Inn in Kenner, Louisiana, between 2013 and 2014. She alleged that rooms were frequently purchased with cash or prepaid cards, that “Do Not Disturb” signs remained on the door for extended periods, and that housekeeping staff were turned away or prevented from completing routine services. The complaint further alleged that significant foot traffic to the room occurred at unusual hours, involving individuals who allegedly were not hotel guests, and that the plaintiff saw multiple commercial sex buyers each day who stayed only briefly. The complaint quoted a single 2014 Yelp review referencing an interest in avoiding a hotel “frequented by hookers,” although the remainder of that review described standard guest feedback concerning price, cleanliness, and noise levels. The plaintiff alleged that Choice exercised broad system-wide control through reservations, guest information, training modules, and standardized operating procedures, and therefore should have detected or prevented the alleged trafficking.
The Maryland complaint involved a different plaintiff, a different state, and a different property—a Quality Inn in Mobile, Alabama. The complaint alleged that the plaintiff’s trafficker forced her to engage in commercial sex acts “numerous times a day,” that he physically or psychologically intimidated her, and that she remained in fear throughout the relevant period. She alleged that she provided hotel staff with “hush money,” used cash or prepaid cards for rooms, hung “Do Not Disturb” signs for days, and experienced heavy foot traffic to her room involving individuals who allegedly were not hotel guests. She alleged that her trafficker selected this particular property because, in her view, hotel personnel did not intervene in suspicious activity. She asserted that Choice controlled certain aspects of franchisee operations, including reservation systems, guest data, training materials, and responses to suspected trafficking, and that this alleged control supported both beneficiary and vicarious liability.
In both cases, however, neither court accepted any allegation as true beyond the standard required for evaluating the motions before them.
Decision
The Louisiana court evaluated the sufficiency of both the beneficiary and vicarious liability theories. As the opinion explains, the plaintiff’s allegations concerning cash payments, prolonged “Do Not Disturb” signs, housekeeping avoidance, late-night foot traffic, and the presence of an alleged trafficker near the property described how she believed the trafficking operated. The court noted, however, that even if those allegations were assumed true for the limited purpose of a motion to dismiss, they did not plausibly allege that Choice “participated in a venture” with any trafficker, a required element of a TVPRA beneficiary-liability claim. The court emphasized that allegations of financial benefit through franchise royalties, or allegations that hotel staff allegedly observed “red flags,” did not equate to participation in a trafficking venture by the franchisor. As a result, the court dismissed the beneficiary-liability claim without prejudice.
The court took a different approach to vicarious liability. According to the opinion, the complaint alleged that Choice controlled guest reservation processes, identity verification, pricing structures, loyalty programs, guest-data systems, and brand-wide training. The court explained that, at the pleading stage, these allegations were sufficient to allow limited discovery on whether an agency relationship existed between the franchisor and franchisee. The court also recognized that agency is a fact-intensive inquiry that could not be resolved based solely on the complaint or on the franchisor’s exemplar franchise agreement. The court therefore allowed the vicarious-liability claim to proceed.
The Maryland court focused on venue, jurisdiction, and procedural efficiency. The opinion noted that the alleged trafficking occurred entirely in Alabama and that the plaintiff resided in Alabama. The court also observed that multiple similar cases filed in Maryland against Choice had already been transferred to other states because the franchisee defendants were not subject to personal jurisdiction in Maryland and because the alleged events occurred elsewhere. The court found these factors compelling and concluded that the Southern District of Alabama was the appropriate forum for the litigation. The court therefore transferred the case without addressing the merits of the pending motion to dismiss.
When considered together, these rulings demonstrate both substantive and procedural dynamics that continue to appear in TVPRA cases against franchisors. Substantively, courts are applying exacting standards to the “participation in a venture” and “knowledge” elements of beneficiary-liability claims, while allowing some vicarious-liability theories to proceed based on allegations of potential operational control that discovery may clarify. Procedurally, courts are transferring cases to the states where the franchisee businesses operate, particularly when the plaintiff chooses to file in the franchisor’s home forum without robust jurisdictional support.
Looking Forward
The pace, volume, and similarity of these TVPRA filings suggest that franchisors now face a coordinated, nationwide litigation effort that is expanding meaningfully. Courts increasingly encounter complaints that share recurring structures: alleged cash payments, repeated short-stay foot traffic, prolonged door signage, alleged staff awareness, and assertions of system-wide franchisor knowledge based on industry reports or customer reviews. These allegations reflect a developing strategy within the plaintiff bar—one that resembles the coordinated joint-employer campaigns of the mid-2010s, when advocates sought to expand franchisor liability by reframing brand standards and system integrity measures as evidence of direct operational control.
The opinions issued here illustrate how courts are responding to these developments. Courts continue to distinguish between brand standards and the level of day-to-day operational control required to establish agency. Courts also require plaintiffs to allege facts tied to specific properties, specific franchisee conduct, and specific knowledge of trafficking related to the plaintiff, not just general allegations about the hotel industry or franchising. Further, courts increasingly direct these cases to the jurisdictions where the alleged trafficking occurred, recognizing that those courts are better positioned to access witnesses, evaluate evidence, and adjudicate claims tied to local operations.
For franchisors, these rulings highlight the value of clear contractual boundaries, robust compliance training, and well-defined roles within the franchise relationship. They also underscore the importance of understanding how allegations framed in one jurisdiction may align with similar allegations raised elsewhere, especially as plaintiffs test beneficiary and vicarious liability theories with increasing frequency. As these filings continue to accelerate, franchisors may benefit from reviewing internal systems, reaffirming the limits of franchisor control, and ensuring that franchisees receive accurate information about reporting protocols without blurring the lines between brand protection and operational management. This emerging TVPRA landscape will likely continue to evolve, and franchisors who monitor these coordinated patterns will be better positioned to respond effectively as the law develops.
This article is based solely on the opinions of the Courts in these matters. 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 Courts’ opinions in these cases.
Thomas O’Connell is a Shareholder at Buchalter APC 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.
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