Anago

Can you provide details on the 8 units that ceased operations in 2024? What were the primary reasons franchisees exited, and how many of these were related to profitability challenges versus other factors?

The 1-year turnover rate of 14.8% is significantly above typical for cleaning franchises. How does the franchisor account for this exit pattern, and what support measures are in place to improve unit retention?

Given the 5-year maximum contract term with no renewal options specified, what happens at the end of the initial term? Do franchisees have guaranteed renewal rights, and under what conditions might renewal be denied?

The royalty rate of 10.0% is above the industry typical range of 6.0-8.1%. Can you explain the value proposition that justifies this higher royalty, and are there any scenarios where this rate could be reduced or adjusted?

The transfer fee of $2,000 is substantially below typical cleaning franchise transfer fees of $5,500-$15,000. Does this lower fee create any disadvantages for the franchisor or franchisees in terms of transfer oversight?

The franchise agreement lists 25 non-curable default events compared to the typical range of 14-22. Can you provide a complete list of these events and clarify which ones pose the greatest risk to franchisees?

Per the dispute resolution clause, all disputes must be arbitrated within 50 miles of Glen Burnie, MD. How many disputes have been pursued through arbitration in the past 3 years, and what were the typical outcomes and costs?

The agreement requires personal guarantees from all owners with unlimited scope covering all obligations. Are there any circumstances under which the personal guarantee can be limited or released?

Can you clarify the cure periods outlined in the termination clause, specifically how the 3-day cure period for health/safety violations is applied in practice, and provide examples of violations that cannot be cured?

The franchise fee of $26,775 is below the typical range. Does this lower initial investment correlate with lower ongoing support, or are all franchisees provided the same level of training and operational support regardless of franchise fee paid?

What is the average gross revenue for reporting franchisees according to Item 19? How many units have provided financial data, and what percentage of the system is this?

The agreement prohibits non-exclusive territory with no encroachment protection. Can the franchisor open or approve multiple units in the same territory, and if so, what restrictions exist?

What is the breakdown of the 14.8% closure rate by geography, unit age, and franchisee experience level? Are certain regions or demographics experiencing higher exit rates?

A 5% late fee applies to payments not made within 10 days, with 18% annual interest on defaults. How many franchisees have been assessed late fees in the past year, and have any franchisees disputed these charges?

The mandatory 2% advertising fund contribution has no minimum performance guarantee. How is advertising fund money allocated, and can franchisees see reporting on return on investment from these contributions?

All equipment and supplies must be purchased from franchisor-approved suppliers. Is there a current list of approved suppliers, and can franchisees source from multiple suppliers or is there a sole-source requirement?

Can the franchisor set maximum and minimum pricing for supplies? If so, what is the range of markup on franchisor-approved products compared to market alternatives?

The non-compete clause requires 2 years without a mileage radius specified. Does this mean a franchisee cannot work in the cleaning industry anywhere for 2 years, or is it limited to a specific geographic area?

What support and training measures are provided post-launch to help franchisees improve profitability and reduce the risk of closure? Are there performance benchmarks or milestones that trigger additional intervention?

Given the 5-year contract maximum with no renewal guarantee, what is the typical trajectory for successful franchisees—do most units close after 5 years, renew informally, or transition to different arrangements?