Marriott International Inc. has filed a lawsuit against one of its franchise hotels in Jamaica, Queens, seeking $2.6 million in damages. The company accuses the hotel of breaching its contract by repurposing the property for an unauthorized “alternative use.”
According to the federal court complaint, Pride Hotel was scheduled to open last November under Marriott’s budget-friendly Aloft and Element brands. However, the hotel’s operators allegedly abandoned their agreement with Marriott and began running the property as a migrant shelter without the company’s approval, violating their franchise contract.
Marriott is seeking at least $2.6 million in compensation.
The complaint also accuses the hotel’s owners of failing to remove Marriott signage and branding and of not paying required franchise fees, further breaching their contract. The owners named in the lawsuit include New York residents Jai Patel, Krishna Mehta, Chandra Mehta, Jagruti Patel, and Vipul Patel.
This legal action, first reported by Law360, comes amid a trend in New York City where numerous hotels have ceased operations for tourists and have instead entered into agreements with the city to operate as migrant shelters, particularly in the area surrounding Pride Hotel.
Marriott sues franchisee for turning Queens hotel into migrant shelter https://t.co/2E2Fdi89TN pic.twitter.com/uW62ZtFXoM
— New York Post (@nypost) August 10, 2024
From Fox Business:
Marriott International is suing one of its franchisees for breach of contract, claiming the defendants violated their agreement with the hotel chain by turning a New York City property into a shelter for migrants.
In a complaint filed in federal court last week, Marriott alleged Pride Hotel LLC, violated its franchisee agreement to run a property in the Jamaica neighborhood of Queens as a dual-branded Aloft and Element hotel, when the operators instead entered into a “lucrative” contract with the City of New York to house migrants and asylum seekers.
Aloft and Element are two of Marriott’s more than 30 brands, and Marriott claims Pride Hotel not only failed to notify Marriott of its plans, but failed to remove Marriott’s trademarks and branding before opening up the hotel as a migrant shelter.
The complaint says Pride Hotel’s move caused “significant harm” to Marriott, which is suing the franchisee for more than $2.6 million in damages.
