April 06, 2026|Franchise Frontlines
April 6, 2026 | U.S. District Court, Middle District of Florida | Unpublished Decision
Executive Summary
In an unpublished decision, the Middle District of Florida granted in part a franchisor’s motion to dismiss a claim brought under the Trafficking Victims Protection Reauthorization Act (“TVPRA”), holding that the plaintiff failed to plausibly allege that the franchisor participated in a sex trafficking venture. The plaintiff argued that Wyndham Hotels & Resorts, Inc., as franchisor of a Days Inn property, exercised sufficient control and derived financial benefit from operations at the hotel where trafficking allegedly occurred. Wyndham countered that the allegations reflected, at most, a traditional franchisor-franchisee relationship and did not establish participation in any unlawful venture. The court agreed with Wyndham, dismissing the TVPRA claim with prejudice and concluding that allegations of revenue collection, brand oversight, and general awareness of trafficking risks were insufficient to establish liability.
Relevant Background
The plaintiff alleged that she was trafficked for commercial sex acts at a franchised Days Inn hotel over a period of several months. According to the complaint, hotel staff observed indicia of trafficking activity, including frequent short-term visitors, extended stays paid in cash, and visible signs of physical abuse. The plaintiff asserted that Wyndham exercised substantial control over the hotel through brand standards, training requirements, audits, and reservation systems, and that Wyndham continued to collect royalties and fees derived from room revenue during the relevant period.
The plaintiff further alleged that Wyndham had actual or constructive knowledge of trafficking activity based on prior litigation, industry warnings, internal compliance data, and patterns in hotel operations. The complaint asserted that Wyndham failed to intervene or take corrective action despite this knowledge, and that its continued financial benefit from the hotel’s operations supported liability under the TVPRA.
The court had previously dismissed earlier versions of the complaint without prejudice, allowing the plaintiff to amend. The third amended complaint again asserted claims under the TVPRA, along with a vicarious liability theory.
Decision
The court focused on whether the plaintiff adequately alleged that Wyndham “participated in a venture” within the meaning of the TVPRA. Applying Eleventh Circuit precedent, the court explained that participation requires more than passive involvement or a standard commercial relationship. A plaintiff must plausibly allege that the defendant took part in a common undertaking involving risk and potential profit, and that the venture itself violated the statute.
The court concluded that the allegations failed to meet this standard. While the complaint described Wyndham’s role in establishing brand standards, conducting audits, and collecting royalties, the court found that these activities were consistent with a conventional franchisor-franchisee relationship. The court emphasized that “observing something is not the same as participating in it,” and that merely continuing to receive revenue from a franchisee, even where misconduct is alleged, does not constitute participation in a trafficking venture.
The court also rejected the plaintiff’s reliance on allegations of knowledge. Although the complaint plausibly alleged that Wyndham had general awareness of trafficking risks in the hospitality industry and may have had constructive knowledge of suspicious activity at the property, the court held that knowledge alone is insufficient absent participation. The court reiterated that the TVPRA does not impose an affirmative duty on franchisors to prevent trafficking and that failure to act, without more, does not establish liability.
Because the plaintiff failed to allege facts demonstrating participation beyond a typical franchisor role, the court dismissed the TVPRA claim with prejudice. The court declined to exercise supplemental jurisdiction over remaining state law claims.
Looking Forward
This decision provides a clear articulation of the limits of franchisor liability under the TVPRA and reinforces a distinction that is critical for franchisors and multi-unit systems. Courts continue to require more than allegations of brand oversight, revenue sharing, or general knowledge of misconduct to establish liability. Instead, plaintiffs must plead facts showing that the franchisor took part in the specific unlawful venture, not merely that it operated a system within which misconduct occurred.
The ruling also underscores that common features of franchise systems—such as standardized training, compliance monitoring, and centralized reservation or reporting systems—do not, without more, transform a franchisor into a participant in a franchisee’s conduct. These operational elements, while potentially relevant in other contexts, remain insufficient to establish liability absent a more direct connection to the alleged wrongdoing.
At the same time, the decision highlights the importance of maintaining clear operational boundaries and ensuring that franchise relationships are implemented consistently with their contractual framework. While the court rejected liability in this instance, it did so based on the absence of allegations tying the franchisor’s conduct to the specific acts at issue. Different facts—particularly those suggesting direct involvement in day-to-day operations or coordination with franchisee conduct—may lead to different outcomes.
Viewed alongside other recent decisions addressing similar claims, this case helps define the contours of franchisor exposure in the TVPRA context. It illustrates that while plaintiffs continue to test the limits of vicarious and indirect liability theories, courts remain focused on requiring a concrete showing of participation before allowing such claims to proceed.
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.
