April 06, 2026|Franchise Frontlines
April 6, 2026 | U.S. District Court, M.D. Florida | Unpublished Opinion
Executive Summary
In an unpublished decision, the U.S. District Court for the Middle District of Florida dismissed with prejudice a Trafficking Victims Protection Reauthorization Act (“TVPRA”) claim against Wyndham Hotels & Resorts, Inc., rejecting an effort to impose liability on a franchisor based on brand standards, audits, and revenue derived from a franchised property. The plaintiff alleged that she was trafficked at a franchised hotel and that Wyndham knowingly benefited from and failed to prevent the conduct. Wyndham argued that the allegations, even if true, did not establish that it participated in a trafficking venture. The court agreed, holding that allegations of general oversight, training, and receipt of franchise revenue—without more—are insufficient to satisfy the statutory requirement of participation in a trafficking venture. The decision underscores the limits of franchisor liability where claims rely on system-level standards rather than direct operational involvement.
Relevant Background
The plaintiff alleged that she was trafficked for commercial sex acts at a hotel operating under the Days Inn by Wyndham brand. According to the complaint, the trafficking occurred over a period of several months and involved repeated short-term room rentals, visible signs of distress, and activity that the plaintiff claimed should have alerted hotel staff and management.
The plaintiff asserted that Wyndham, as franchisor, exercised substantial control over the hotel through its brand standards, required reservation systems, training programs, and compliance audits. She further alleged that Wyndham received royalties based on gross room revenue and had access to data reflecting patterns consistent with trafficking activity, such as frequent cash payments, high guest turnover, and short-duration stays.
Based on these allegations, the plaintiff brought claims under the TVPRA, asserting that Wyndham participated in and knowingly benefited from a trafficking venture. The plaintiff also pursued a vicarious liability theory, alleging that Wyndham could be held responsible for the conduct of the franchised hotel.
Wyndham moved to dismiss, arguing that the allegations failed to establish participation in a trafficking venture and that the claims impermissibly attempted to convert routine franchisor activities into actionable conduct under the statute.
Decision
The court granted Wyndham’s motion to dismiss the primary TVPRA claim with prejudice, concluding that the complaint failed to allege facts sufficient to show that Wyndham participated in a trafficking venture.
The court focused on the statutory requirement that a defendant must “participate in a venture,” which the Eleventh Circuit has interpreted to mean taking part in a common undertaking involving risk and potential profit. The court emphasized that mere awareness of wrongful conduct or passive receipt of revenue is not enough. Rather, the plaintiff must allege conduct that goes beyond an ordinary commercial relationship.
Applying that standard, the court found that the allegations against Wyndham were insufficient. The complaint relied heavily on Wyndham’s role as a franchisor—its brand standards, training requirements, auditing authority, and revenue model—but did not allege facts showing that Wyndham took part in the alleged trafficking activity itself. The court noted that “observing something is not the same as participating in it” and that “something more than engaging in an ordinary buyer-seller transaction is required” to establish liability under the statute .
The court further rejected the argument that Wyndham’s receipt of royalties and other fees tied to hotel performance constituted participation in a trafficking venture. While the plaintiff alleged that Wyndham had a financial incentive to ignore unlawful conduct, the court found that such allegations did not transform a standard franchise revenue model into actionable participation.
With respect to knowledge, the court acknowledged that the complaint alleged facts suggesting general awareness of trafficking risks in the hospitality industry and potential indicators at the property. However, the court made clear that knowledge alone is insufficient absent participation in a trafficking venture. Because the plaintiff failed to adequately plead participation, the claim could not proceed even if knowledge were assumed.
The court allowed a separate vicarious liability theory to proceed at that stage but declined to revisit its prior ruling on that issue. Having dismissed the federal claim with prejudice, the court declined to exercise supplemental jurisdiction over the remaining state-law claim.
Looking Forward
This decision provides a clear reaffirmation of the limits of franchisor liability under the TVPRA and similar statutes. Courts continue to distinguish between system-level oversight and direct participation in alleged misconduct. Brand standards, training programs, audit rights, and centralized reservation systems—standing alone—do not establish participation in a wrongful venture.
The opinion is particularly instructive in addressing attempts to recast ordinary franchise relationships as joint enterprises based on economic structure or operational influence. The court’s reasoning underscores that receipt of royalties tied to franchise performance, even when combined with allegations of knowledge, does not create liability without additional facts demonstrating active involvement in the alleged wrongdoing.
At the same time, the decision reflects a careful, fact-specific analysis rather than a categorical rule. The outcome turned on the absence of allegations connecting the franchisor to the specific conduct at issue beyond its role in maintaining brand standards and collecting fees. As a result, the case reinforces the importance of maintaining appropriate boundaries between franchisor oversight and day-to-day operations at the unit level.
For franchisors, the decision illustrates how courts evaluate claims that seek to expand liability based on system-wide practices. Properly structured franchise systems that rely on brand standards and compliance mechanisms—without crossing into operational control over specific conduct—remain distinguishable from the type of participation required to support statutory liability.
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.
