Amorino

How is the 0% royalty rate structured—does the franchisor generate revenue primarily through the 3% ad fund, initial franchise fees, and product markups, or are there additional revenue sources not disclosed in the franchise agreement?

The transfer fee of $1,000 is significantly lower than industry norms ($7,500-$17,500). Are there additional costs, franchisor approval requirements, or conditions that apply to franchise transfers beyond this stated fee?

What specific circumstances led to the one unit closure in 2022 classified as 'ceased other,' and does this classification indicate voluntary exit, franchisor action, or external factors?

The agreement lists 21 termination causes—1 above the typical range. Can you provide a breakdown of which causes allow for cure periods versus immediate termination, and how many fall into each category?

Your non-compete radius is 3 miles, narrower than the typical range (5-23.75 miles). How is this distance enforced, and has this created competitive issues or encroachment disputes in the market?

Gross sales significantly exceed typical ranges for this franchise type ($1.1M average vs. $468K-$990K typical). What percentage of reporting units contributed to these figures, and what explains the above-average performance?

Can you detail the single litigation case from the past 3 years—what was the nature of the dispute, outcome, and whether it involved operational, financial, or contractual issues?

Since the agreement includes 21 non-curable defaults resulting in immediate termination with no cure period, can you clarify which operational or financial issues trigger immediate termination versus those with the 2-day cure period mentioned?

The franchise agreement requires exclusive purchases of all trademarked products from the franchisor and approval of all other suppliers. What are typical product costs and markups, and how does this compare to franchisees' ability to source competitively?

All disputes require binding arbitration in New York County—what are typical costs and timeframes for arbitration under this provision, and have past disputes followed this process?

The personal guarantee clause provides unlimited liability for all principals. Are there any circumstances under which this guarantee can be limited, and how does this affect franchisees with multiple business interests?

With a 10-year initial term and 2 five-year renewals available, what criteria determine renewal eligibility, and has every franchisee who sought renewal been approved?

How many franchisees have successfully renewed their agreements beyond the initial 10-year term, and what percentage of the system operates under renewed agreements versus original terms?

The non-solicitation clause restricts franchisees post-term from hiring franchisor employees and customers. How is customer list defined, and what enforcement actions has the franchisor taken for violations?

What is the breakdown between franchisor-owned units and franchised units in the current system of 22 units, and do company-owned stores operate under different terms or performance standards?

The ad fund rate is 3%—how is this fund allocated between national advertising, local market support, and administrative costs, and can franchisees request accounting of fund usage?

Item 19 financial performance data is provided—how many units of the 22 current units reported sales figures, and what is the range between top and bottom performing units?

Can you provide the status and details of the one pending or recently resolved litigation case, including whether it involved franchise agreement compliance, financial disputes, or other operational matters?

The system grew 4 units in the past year (22.2% growth). What is the pipeline of new franchisees signed, and what are typical sales ramp timelines for new units from opening to profitability?