What is the franchise fee, and are there any additional upfront costs not listed in the standard disclosure document?
#1
What are the royalty rate, advertising fund contribution, and any technology or other ongoing fees charged to franchisees?
#2
How many franchisees currently operate units, and how has this number changed over the past 3 years?
#3
What percentage of franchisees have exited the system in the past 1, 3, and 5 years, and what were the primary reasons for departure?
#4
Does the franchisor provide Item 19 (Financial Performance Representations) in the Franchise Disclosure Document, and if so, what are the median and average unit sales figures?
#5
What is the initial franchise term length, and how many renewal options are available with what renewal fees?
#6
What specific territory rights are granted—are franchisees given exclusive territory, and if so, how is the territory defined and protected?
#7
What are the non-compete restrictions for departing franchisees, including duration and geographic radius?
#8
Has the franchisor been involved in litigation in the past 3 years, and if so, what were the nature and outcomes of these cases?
#9
What support and training does the franchisor provide at startup and on an ongoing basis?
#10
Are there any restrictions on franchisees' ability to transfer or sell their franchise unit, and what are the associated transfer fees?
#11
How does the franchisor handle disputes with franchisees—what is the dispute resolution process, and are there any mandatory arbitration or litigation clauses?
#12
What is the policy regarding territorial encroachment—can the franchisor open competing units near existing franchisees?
#13
Can you provide references from 5-10 current franchisees and at least 3 franchisees who have exited the system in the past 2 years?
#14
What were the primary reasons for any franchise terminations or non-renewals in the past 3 years?
#15
Does the franchisor have any ongoing marketing or technology requirements, and are there separate fees associated with these?
#16
What is the typical time to profitability for a new franchisee, and how does this compare to industry benchmarks?
#17
Are there any lawsuits pending involving the franchisor as of the current date, and if so, what are the details?
#18