What specific circumstances led to the closure of 2 units in 2023, and are there any ongoing financial or operational challenges affecting the remaining 6 franchisees?
#1
The franchise fee of $45,000 is approximately $5,000 higher than the typical range for fast casual restaurants. What additional benefits, services, or support justify this premium pricing compared to competitors?
#2
The transfer fee of $30,000 is significantly above the typical industry range of $8,750-$20,000. What is the justification for this fee, and is it negotiable under any circumstances?
#3
Can you provide details about the 2 units that ceased operations in 2023, including unit economics, franchise duration, and reasons for closure (e.g., market conditions, franchisee underperformance, location issues)?
#4
With a 1-year turnover rate of 33.3%, what is your strategy to improve unit retention and what support do you provide to underperforming franchisees before closures occur?
#5
The non-compete radius of 50 miles is significantly broader than typical (5-20 miles). How do you determine and justify this radius, and does it meaningfully restrict franchisee business opportunities in rural or less densely populated areas?
#6
Why does the franchise agreement include only a 10-year total potential term compared to the typical 20-26 years for fast casual restaurants, and what happens to franchisees who wish to continue beyond year 10?
#7
The renewal conditions count of 5 is below typical standards. What renewal options are available to franchisees, what are the specific renewal conditions, and what is the renewal fee structure beyond the stated $2,000 fee?
#8
Given that the System Health score is 0/100, significantly below the typical range of 50-75, what objective measures indicate the overall health and stability of the Afuri franchise system?
#9
Can you explain the operational control restrictions mentioned regarding mandatory supplier relationships and pricing controls? How restrictive are these in practice, and what flexibility do franchisees have in sourcing decisions?
#10
The Risk Factors score of 30/100 is well below the typical range of 64-80. What are the primary risk factors the franchisor has identified, and what mitigation strategies are in place?
#11
Are there any pending disputes, regulatory investigations, or other issues not reflected in the 3-year litigation history that prospective franchisees should be aware of?
#12
What are the financial performance thresholds that trigger franchisor intervention or potential termination, and how are franchisees supported if unit sales fall below projections?
#13
Can you provide current franchisee contact information or references who have operated units for at least 3 years, and are there any confidentiality restrictions on what franchisees can disclose?
#14
The 1.0% advertising fund rate is below typical standards. How is this fund utilized, and do franchisees have visibility into advertising spend allocation and campaign effectiveness?
#15
What are the 14 non-curable default provisions referenced in the termination clause, and how frequently have these been invoked to terminate franchisees?
#16
Given the post-term non-compete restricts activity for 2 years within 50 miles of the territory and any franchisor location, how is this practically enforced and have you pursued litigation against franchisees who violated non-compete terms?
#17
Are personal guarantees required from all owners, and what recourse does the franchisor have if a franchisee declares bankruptcy or becomes insolvent during the franchise term?
#18
What is the current number of corporate-owned locations versus franchised locations, and what is the franchisor's strategy regarding future corporate expansion versus franchising?
#19