Choice Hotels Franchisees Fight Arbitration For Kickback Suit

Law360 (August 13, 2020, 9:22 PM EDT) -- Dozens of Choice Hotels franchisees are fighting the hospitality company's attempt to arbitrate their claims that a vendor kickback scheme cost them $61 million and that the chain more aggressively enforces its contracts against Indian and other South Asian franchisees.

The franchisees told a Pennsylvania federal court on Wednesday that the arbitration clauses of Choice Hotels International Inc.'s franchise agreements violate the Federal Arbitration Act by barring pre-hearing discovery proceedings without the consent of both parties and impose hefty, unaffordable arbitration costs. According to the motion, the plaintiffs' counsel said they have had to offer their services at a "profound discount," even...

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