<PAGE>

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                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549




                                    FORM 8-K

                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934



      Date of report (Date of earliest event reported):  November 1, 2000



                          Fairfield Communities, Inc.
             (Exact Name of Registrant as Specified in its Charter)



        Delaware                      1-8096                     71-0390438
(State of Incorporation)           (Commission)               (I.R.S. Employer
                                   File Number)              Identification No.)

        8669 Commodity Circle, Suite 200, Orlando, Florida              32819
            (Address of principal executive offices)                 (Zip Code)


                 Registrant's telephone number:  (407) 370-5200


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<PAGE>

ITEM 5.  Other Events.

     Merger
     ------

     On November 1, 2000, Fairfield Communities, Inc. entered into an Agreement
and Plan of Merger (the "Merger Agreement") with Cendant Corporation and Grand
Slam Acquisition Corp., a subsidiary of Cendant, whereby Grand Slam Acquisition
Corp. will merge with and into Fairfield with Fairfield as the surviving
corporation.  Following the merger, Fairfield will be a wholly owned subsidiary
of Cendant.

     As more fully described in Section 2.1 of the Merger Agreement, each issued
and outstanding Fairfield common share (other than shares to be cancelled and
shares held by dissenters) shall be converted, at the election of the holder,
into the right to receive the following:

     .  If the holder has elected or is deemed to have elected to receive shares
        of common stock of Cendant, which are designated as CD common stock, the
        holder will receive 1.2500 fully paid and nonassessable shares of CD
        common stock in exchange for each Fairfield common share unless that
        initial exchange ratio is adjusted. That initial exchange ratio will be
        adjusted if the average trading price of shares of CD common stock is
        greater or less than $12.00. The "average trading price" means the
        arithmetic average of the 4:00 p.m. Eastern Time closing sales prices of
        CD common stock reported on the New York Stock Exchange Composite Tape
        for the 20 consecutive trading days ending on (and including) the
        trading day immediately prior to the date of the special meeting of
        Fairfield stockholders to consider the merger. The adjustments to the
        exchange ratio are as follows:
<TABLE>
<CAPTION>
             Average Trading Price                                Exchange Ratio
------------------------------------------------  ----------------------------------------------
<S>                                               <C>
Equal to or greater than $13.5960                 Equal to the quotient of $16.00 divided by
                                                  the average trading price
Greater than $12.00 but less than $13.5960        Equal to 0.6250 plus the quotient of $7.5
                                                  divided by the average trading price
Equal to $12.00                                   Equal to 1.2500
Less than $12.00 but greater than $7.00           Equal to the quotient of $15 divided by the
                                                  average trading price
Equal to or less than $7.00                       Equal to 2.1428
</TABLE>

     .  If the holder has elected to receive cash, the holder will receive in
        exchange for each Fairfield common share $15.00 in cash, plus, if the
        average trading price is greater than $12.00, a fraction of a share of
        Cendant CD common stock which shall equal the excess of the value of the
        consideration paid to holders electing to receive CD common stock over
        $15.00, but not to exceed $1.00.

                                       2
<PAGE>

     The aggregate amount of cash which Cendant is required to pay in the merger
(other than in respect of dissenting shares) shall not exceed the product of
$7.50 multiplied by the number of outstanding Fairfield common shares
immediately prior to the effective time of the merger.  If the aggregate
elections for cash consideration plus an amount of cash equal to the number of
dissenting shares multiplied by the value of the stock consideration paid by
Cendant exceeds the amount Cendant is required to pay in cash, the holders
electing to receive cash will receive a pro rata portion of the cash to be paid
by Cendant for each Fairfield common share and will receive CD common stock as
consideration for the remaining value of the holder's Fairfield common share.

     Cendant has the right, exercisable at any time at least two business days
prior to the closing of the merger, to pay cash for any Fairfield common shares
instead of issuing CD common stock.  Any increase in the amount of cash to be
paid by Cendant will first be applied to shares for which a holder elected to
receive cash but were subject to proration due to the aggregate cash elections
by holders of Fairfield common shares exceeding the amount of cash payable by
Cendant.

     If a holder fails to elect to receive cash or CD common stock, the holder
will receive shares of CD common stock.  Cendant will not issue fractional
shares, and will pay cash in lieu of any fractional shares.

     At Cendant's option, immediately prior to completion of the merger,
Fairfield will transfer to a newly formed, wholly owned subsidiary, certain of
its assets and liabilities relating to Fairfield's real estate and vacation
ownership interest development business.  Cendant may require Fairfield to
dispose of the common shares of the new subsidiary via a pro-rata distribution
to each Fairfield stockholder or a transfer of such common shares to a third
party, at Cendant's option, immediately prior to the completion of the merger.
Such disposal will not create any adjustment to the consideration to be paid in
the merger and is not a condition to the merger.

     In connection with entering into the Merger Agreement, Fairfield and
Cendant entered into a Stock Option Agreement, dated November 1, 2000, pursuant
to which Fairfield granted Cendant an option to purchase up to approximately
19.9% of the then-outstanding shares of Fairfield common shares exercisable in
the circumstances specified in the Stock Option Agreement.  In addition, certain
holders of Fairfield common shares and Cendant entered into a Voting Agreement,
dated November 1, 2000, whereby the holders agreed to vote the Fairfield common
shares owned by them at the time of any shareholders meeting in favor of the
merger and against any proposal to thwart the merger.  That Voting Agreement
initially applies to approximately 7.18 million issued and outstanding Fairfield
common shares held by those holders and 1,375,000 Fairfield common shares
issuable upon the exercise of outstanding options (of which 510,000 are
exercisable within 60 days of November 1, 2000.)

     The foregoing description of the Merger Agreement and Stock Option
Agreement is qualified in its entirety by reference to the full text of the
Merger Agreement and Stock Option Agreement, copies of which are filed as
exhibits to this report and incorporated herein by this reference.

                                       3
<PAGE>

     Rights Agreement
     ----------------

     On November 1, 2000, the board of directors of Fairfield approved Amendment
No. 2, dated as of November 1, 2000 (the "Amendment"), to the Rights Agreement,
dated as of September 1, 1992, as amended, between Fairfield and The First
National Bank of Boston (as successor to Society National Bank).  The Amendment
made the provisions of the Rights Agreement inapplicable to the transactions
contemplated by the Merger Agreement.

     The foregoing description of the Amendment is qualified in its entirety by
reference to the full text of the Amendment, a copy of which is filed as an
exhibit to this report and incorporated herein by this reference.  Copies of the
Rights Agreement are available free of charge from Fairfield.

     Statements in this report (including the documents incorporated by
reference in this report) include certain forward-looking statements.  Many of
those statements are identified by words such as "expects," "anticipates,"
"intends," "plans," "believes," "seeks," "estimates," and "should," and
variations of these words and similar expressions.  Forward-looking statements
that we make are based on estimates, projections, beliefs and assumptions at the
time of the statements and are not guarantees of future performance.  We
disclaim any obligation to update or revise any forward-looking statement based
on the occurrence of future events, the receipt of new information, or
otherwise.

     Actual future performance, outcomes and results may differ materially from
those we expressed in forward-looking statements as a result of a number of
risks, uncertainties and assumptions.  Representative examples of these factors
include (without limitation):

     .  general industry and economic conditions;

     .  interest rate trends;

     .  regulatory changes;

     .  availability of real estate properties;

     .  competition from national hospitality companies and other competitive
        factors and pricing pressures;

     .  an increase or decrease in the number of resort properties subject to
        the percentage-of-completion method of accounting which requires
        deferral of sales and profits on such projects to the extent that the
        construction is not substantially complete;

     .  shifts in customer demands;

     .  changes in operating expenses, including employee wages, commission
        structures and related benefits;

     .  economic cycles;

                                       4
<PAGE>

     .  the risk of us incurring an unfavorable judgment in any litigation or
        audit, and the impact of any related monetary or equity damages;

     .  our lack of experience in markets where we have purchased land and are
        developing vacation ownership resorts for the first time;

     .  our success in hiring, training and retaining qualified employees; and

     .  the continued availability of financing in the amounts and on the terms
        necessary to support our future business.

ITEM 7.  Financial Statements and Exhibits.
         ---------------------------------

(a)    Exhibits:
       ---------
<TABLE>
<CAPTION>
        Number                  Description
        ------                  -----------
        <S>             <C>
         2.1            Agreement and Plan of Merger, dated as of November 1,
                        2000, by and among Cendant Corporation, Grand Slam
                        Acquisition Corp. and Fairfield Communities, Inc.

         2.2            Stock Option Agreement, dated as of November 1, 2000,
                        between Fairfield Communities, Inc. and Cendant
                        Corporation

         2.3            Amendment No. 2, dated as of November 1, 2000, to the
                        Rights Agreement, dated as of September 1, 1992, as
                        amended, between Fairfield Communities, Inc. and The
                        First National Bank of Boston, a/k/a Bank Boston, N.A.
                        and by succession Fleet National Bank (as successor to
                        Society National Bank)

         99.1           Press Release, dated November 2, 2000 (previously filed
                        under Rule 425 of the Securities Act of 1933 on November
                        3, 2000, and incorporated herein by reference.)
</TABLE>

                                       5
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                                   SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.


                              FAIRFIELD COMMUNITIES, INC.



                              By: /s/ Marcel J. Dumeny
                                  -----------------------------
                                  Name:  Marcel J. Dumeny
                                  Title:  Executive Vice President


Dated: November 14, 2000

                                       6
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                               INDEX TO EXHIBITS
                               -----------------

<TABLE>
<CAPTION>
        Number          Description
        ------          -----------
      <S>              <C>
         2.1            Agreement and Plan of Merger, dated as of November 1,
                        2000, by and among Cendant Corporation, Grand Slam
                        Acquisition Corp. and Fairfield Communities, Inc.

         2.2            Stock Option Agreement, dated as of November 1, 2000,
                        between Fairfield Communities, Inc. and Cendant
                        Corporation

         2.3            Amendment No. 2, dated as of November 1, 2000, to the
                        Rights Agreement, dated as of September 1, 1992, as
                        amended, between Fairfield Communities, Inc. and The
                        First National Bank of Boston, a/k/a Bank Boston, N.A.
                        and by succession Fleet National Bank (as successor to
                        Society National Bank)

         99.1           Press Release, dated November 2, 2000 (previously filed
                        under Rule 425 of the Securities Act of 1933 on November
                        3, 2000, and incorporated herein by reference.)
</TABLE>

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