Can you provide details on the 2 litigation cases filed in the past 3 years, specifically the nature of claims when the franchisor was the defendant and the outcomes or current status?
#1
Why has the franchise system declined by 15 units over 3 years (-2.58% CAGR), and what is the franchisor's strategy to return to unit growth?
#2
The contract includes 23 termination causes compared to a typical range of 12-21—what specific operational or financial violations beyond the minimum $300,000 annual gross sales requirement can result in termination?
#3
Given that terminations increased from 0 in 2021 to 3-4 per year in 2022-2023, what changes in enforcement or standards triggered this increase?
#4
How does the franchisor define 'substantial compliance' required for renewal, and what specific performance gaps would result in non-renewal?
#5
Can you clarify the calculation and application of the 1.5% monthly late payment fee (18% annually)—does this apply to royalty payments only, or all financial obligations?
#6
The technology fee of $50/month is below typical ranges for this category—does this cover specific software, platforms, or services, and are there separate charges for additional technology requirements?
#7
What percentage of franchisees in the bottom quartile (earning $448,444 in gross sales) are meeting the $300,000 minimum annual sales requirement, and how many have been terminated for failing to meet this threshold?
#8
The non-compete clause restricts activity for 2 years within 10 miles—does this apply only to the franchisee, or does it extend to spouse and other household members?
#9
With a 20-year initial term and 20-year renewal option (40-year total potential term), significantly longer than typical 10-20 year terms, what circumstances would prevent renewal after 20 years?
#10
Are the 8 renewal conditions required for the successor franchise term listed in the disclosure document, and can you provide the specific criteria?
#11
How many of the 6 closures in 2021, 3 in 2022, and 5 in 2023 were franchisee-initiated versus franchisor-directed, and what were the primary reasons cited?
#12
The territory is protected but not exclusive—can the franchisor open competing locations within the protected territory, and have any encroachment disputes contributed to the 2 litigation cases?
#13
What support and training services are included to justify the 95/100 Support & Training score, and are there ongoing training requirements or costs beyond the monthly technology fee?
#14
Can you explain why litigation cases increased to 2 in 3 years versus the typical 0-1 for this franchise type, and whether these involved franchisee disputes or other parties?
#15
Are there any pending investigations or regulatory actions by state attorneys general or the FTC regarding this franchise system?
#16
What is the franchisee renewal rate historically, and how many franchisees have exercised the renewal option in the past 5 years?
#17
Given the decline in unit count, have you made changes to franchisee support, operational standards, or fee structures, and if so, how do these affect new franchise agreements?
#18
The dispute resolution clause requires binding arbitration within 50 miles of Plymouth, Michigan—if a franchisee operates outside this region, how are disputes resolved?
#19
Can you provide a breakdown of the 2 franchisor-as-defendant cases by claim type (e.g., breach of contract, misrepresentation, franchise law violations) and resolution method?
#20