1st Class Real Estate

Can you provide details on the 2 litigation cases initiated by the franchisor? What were the claims, outcomes, and whether they involved franchisees?

Why is the transfer fee of $1,500 substantially lower than the industry typical range of $5,000-$10,000? What transfer restrictions or conditions apply?

The total potential contract term is 5 years with no renewal options disclosed. Are renewal options available beyond the initial term, and if so, what are the terms and associated fees?

Support & Training scores 65, below the typical range of 71.0-78.5. What specific training and ongoing support does the franchisor provide, and how does this compare to initial expectations?

Investment Costs score 81, above typical for the category. Can you itemize all required startup investments beyond the $25,000 franchise fee?

The technology fee is $50 monthly, below the typical range of $53.75-$393.75. Does this cover all technology services, or are additional technology costs required?

7 units closed in 2023 and 5 in 2024. Can you explain the reasons for these closures and whether they were driven by market conditions, franchisee performance, or franchisor actions?

What are the 10 specific termination causes listed in the franchise agreement, and do they differ materially from industry standards?

The non-compete clause lists 0 years with N/A miles. Does this mean there are no geographic or time-based non-compete restrictions on former franchisees?

Territory is protected but not exclusive. How is encroachment defined and what remedies are available if the franchisor or another franchisee encroaches?

The franchise agreement includes mandatory arbitration with class action and jury trial waivers for Illinois and Maryland residents. How does this dispute resolution process work, and what costs are involved?

Personal guarantees and joint and several liability are required. Does this apply to all owners, and what happens if one guarantor wants to exit the agreement?

The indemnification clause covers all claims including contractual liability to third parties. Can you provide examples of claims that franchisees have been required to indemnify the franchisor for?

Only 4 units were terminated in 2023 and zero in 2024, despite a non-renewal rate of 2.0%. What is causing non-renewals, and are franchisees choosing to exit or is the franchisor declining renewal?

Item 19 financial performance data is not provided. Can you share historical gross sales data, average unit volumes, and profit margins for franchisees?

The renewal fee is listed as $5,000. Are there other fees due upon renewal (e.g., technology updates, facility upgrades)?

How many of the 7 transfers in 2022 and 3 transfers in 2023 were approved, and were there any denied transfer requests?

What is the composition of the 3 'ceased other' units in both 2023 and 2024? What circumstances led to these exits?