The technology fee of $2,000 monthly is significantly higher than typical for real estate franchises. What specific technology services and platforms are included in this fee, and is it subject to annual increases?
#1
Can you provide details on the pending litigation case that names the franchisor as defendant, including the nature of the claim and expected timeline for resolution?
#2
Your royalty rate of 5.0% is below the industry range for real estate franchises. Are there conditions under which this rate increases, or is it capped for the entire franchise term?
#3
The franchise fee of $15,000 is at the lower end of typical startup costs. What is included in this fee, and what additional out-of-pocket costs should a franchisee expect before opening?
#4
With 4 terminations in 2022 and 3 in 2023, what were the primary reasons for these franchisor-initiated terminations, and what compliance issues led to them?
#5
Territory is marked as protected but not exclusive. How are territory boundaries defined, and what prevents the franchisor from adding additional units in or near my territory?
#6
The renewal conditions count of 4 is below typical. What are these specific conditions, and how difficult have existing franchisees found it to meet them for renewal?
#7
Item 19 financial performance data is not provided. Will you provide average unit volumes (AUV), revenue ranges, or profitability data for franchisees of different tenure?
#8
Can you clarify the operational control provision requiring purchase of business materials from the franchisor across 8 categories? What are these categories, and how are prices determined?
#9
The dispute resolution clause requires individual arbitration in St. Tammany Parish. Have any of the 1 pending or prior cases involved disputes over franchise operations, and how was resolution handled?
#10
With a 3-year CAGR of 15.69%, what is driving this rapid expansion, and are there saturation concerns in existing markets that could affect territory value?
#11
The termination clause allows cure periods of 5 days for real estate/employment/health/safety violations and 30 days for other breaches. Can you provide examples of violations that triggered the 5-day vs. 30-day cures?
#12
What are the spouse liability requirements under the personal guarantee clause, and when are spouses required to sign?
#13
Are franchisees permitted to engage in related real estate activities outside the 1 Percent Lists brand, or does the operational control clause prohibit ancillary services?
#14
The transfer fee of $7,500 equals your renewal fee. Are there other costs or approval requirements beyond this fee for transferring a franchise unit?
#15
Zero transfers occurred in the past year despite 4.3% turnover. Are departing franchisees exiting the business entirely, or are transfers being denied or discouraged?
#16
The renewal options provide a total potential term of 17 years. Will the royalty rate, technology fee, and renewal conditions remain the same during renewals, or are they subject to renegotiation?
#17
Class action waivers and jury trial waivers are required in your dispute resolution clause. Are franchisees required to agree to these before signing the franchise agreement?
#18
Can you provide a list of 'previously approved suppliers' for the 8 categories of required purchases, along with information on pricing competitiveness versus non-approved vendors?
#19
Support & Training and Investment Costs scores are above typical for the category. What specific training programs and ongoing support services justify these higher ratings?
#20