The franchise fee of $10,000 is significantly lower than typical for business services franchises ($31,125-$50,000). What is included in this initial fee, and are there additional required startup costs not reflected in the franchise fee?
#1
Can you provide a breakdown of the 4 unit exits recorded between 2022-2024? Specifically, what were the reasons for the 2 closures in 2023 and the 1 closure in 2024?
#2
The total potential contract term of 30 years (10 initial + 2×10 renewals) exceeds the typical range of 10-20 years. What are the conditions for renewal, and what fees apply at each renewal?
#3
The non-compete restriction covers 100 miles, which is double the typical 10-50 mile range. How is this restriction enforced, and what constitutes a competing business under the agreement?
#4
The transfer fee of $2,000 is substantially below the typical range of $5,250-$19,500. Are there conditions under which this fee could increase, and what is included in the transfer approval process?
#5
The franchise agreement mentions 12 non-curable defaults that result in immediate termination. Can you provide the full list of these non-curable defaults and examples of how they have been applied?
#6
What is the minimum number of chapters required by Schedule B, and are there penalties if a franchisee fails to establish or maintain this minimum?
#7
Personal guarantees are required for corporate franchisees with unlimited liability. In the past 3 years, have any personal guarantees been enforced, and what were the circumstances?
#8
Late payments bear 18% annual interest. Has this been applied to franchisees, and what is the typical payment terms requirement?
#9
The agreement requires indemnification of AmSpirit for all claims. Can you provide clarification on the scope and any caps or limitations on this indemnification obligation?
#10
With no territory exclusivity or encroachment protection, what prevents AmSpirit from opening competing locations or recruiting members from an existing franchisee's area?
#11
Only 1 unit has been added in the past 3 years while 4 have exited. What is the franchisor's growth strategy, and what support is provided for franchisee recruitment and member acquisition?
#12
The franchise agreement allows termination for 20 total defaults. How are defaults counted and tracked, and can a franchisee cure multiple defaults or does each default count separately?
#13
What financial performance support or Item 19 data is available? The FDD does not include Item 19 disclosures—what sales or profitability information can be provided?
#14
The renewal fee is $2,000. Are there any other fees or cost increases associated with renewal, or does the franchisee return to the same fee structure?
#15
What specific training and ongoing support is provided to franchisees, given the 77/100 Support & Training score, and what is the frequency and format of this support?
#16
The System Health score is 49/100. What operational or performance challenges is the system currently facing?
#17
Can you explain the decline from 20 units (3 years ago) to the current 19 units? What was the primary driver of this contraction?
#18
Are there any disputes or complaints filed against AmSpirit with state franchise regulators, the FTC, or Better Business Bureau, separate from formal litigation?
#19
What happens to the franchisee's customer relationships and chapter memberships in the event of termination or non-renewal?
#20