A federal district court in New Jersey recently entered an unopposed default judgement for breach of contract against Mani Hotels, LLC and Mehulkumar Ahir arising from the early termination of a franchise agreement with Days Inn Worldwide, Inc. Days Inn Worldwide, Inc. v. Mani Hotels, LLC, 2025 WL 1576939 (D. N.J., June 5, 2025).
Mani Hotels and Days Inn Worldwide executed a fifteen-year franchise agreement effective April 2017. The franchise agreement provided that Days Inn Worldwide could terminate the contract immediately if Mani Hotels ceased operating its hotel as a Days Inn® before the end of the contract’s term. The franchise agreement also provided for liquidated damages in the event of such an early termination. Mani Hotels closed its hotel five years into the franchise agreement. Days Inn Worldwide then sued Mani Hotels and its proprietor and guarantor, Ahir.
Mani Hotels and Ahir were properly served but did not appear or participate in the litigation. Days Inn Worldwide moved for default judgment and the court found that default judgment was appropriate because Days Inn Worldwide had sufficiently alleged a claim for breach of contract. However, the court reserved ruling on Days Inn Worldwide’s request for damages until the court received more evidence substantiating the claimed damages. Days Inn Worldwide submitted a sworn affidavit from its Vice President of Global Franchise Administration in support of its initial request for $157,619.04 in unpaid liquidated damages and $64,282.71 in interest. However, the court stated it needed additional evidence of Days Inn Worldwide’s damages such as invoices or itemized statements to enter a damages award. The court gave Days Inn Worldwide 30 days to produce the additional evidence.
*Nia Dumas is a Summer Associate for Lathrop GPM who contributed to the writing of this post.
[View source.]
