Angry Crab Shack

The transfer fee of $20,000 is above industry norms for casual dining. What services or approvals are included in this fee, and is it negotiable under any circumstances?

The non-compete clause specifies only 1 year and 15 miles, compared to the typical 2-year standard. Are there any circumstances where this term could be extended or where the franchisor enforces a longer period through litigation?

The total potential term of 10 years is substantially shorter than the typical 20–25 years in casual dining. How many renewal options are available, and what is the renewal term length for each option?

The franchise agreement identifies 17 non-curable defaults and 7 curable defaults with cure periods of 10–30 days. What are the most common reasons for termination in the system, and have any franchisees successfully cured defaults?

One litigation case was initiated by the franchisor. Can you provide details about the nature of this case, the outcome, and whether it involved a franchisee or another party?

The system reports zero closures, terminations, and transfers over 3 years. Can you explain how this data was compiled and confirm whether all units remain in operation under original franchisees?

Average gross sales of $2,889,286 significantly exceed the typical range for casual dining. What is the range of sales across the system, and do these figures represent company-operated stores, franchisee-operated stores, or a mix?

The monthly technology fee of $80 is notably low for the industry. What does this fee cover, and are there additional technology-related costs or mandatory system upgrades not included in this figure?

The franchise agreement requires approval for all food product suppliers and includes 8 specific supplier restriction requirements. What percentage of monthly food costs must typically be sourced from approved suppliers, and are there opportunities for volume discounts or preferred vendor relationships?

Personal guarantees are required from owners with 5% or greater equity interest, including spouses. What are the specific liabilities covered under this guarantee, and does it survive the termination or expiration of the franchise agreement?

Franchisees must purchase equipment and supplies from approved suppliers. Does the franchisor or any affiliated entity profit from these supplier relationships, and can you provide the cost of initial equipment packages?

The franchise agreement includes cross-default provisions. What triggers could cause a cross-default, and can a franchisee cure one type of default to avoid triggering others?

With no exclusive territory protection despite encroachment protections being in place, how many locations operate within a given geographic radius of existing units, and what is the franchisor's policy on location density?

The system achieved 9.5% net unit growth in 1 year and 6.6% compound annual growth over 3 years. What is the franchisor's target growth rate, and how many new units are planned for the next 3 years?

Item 19 financial performance data is provided. Can you clarify whether the reported sales figures represent gross revenue or net revenue after discounts and refunds?

The litigation record shows 1 case initiated against the franchisor historically. Are there any regulatory complaints, cease-and-desist orders, or settlements not reflected in formal litigation counts?

The franchise agreement allows the franchisor to establish quality standards for suppliers. What recourse do franchisees have if approved suppliers provide poor quality or service?

The renewal fee is $12,500 and transfer fee is $20,000, totaling $32,500 in potential transaction costs. Are these fees waived or reduced if the franchisee renews before seeking a transfer?

Given the shorter 10-year total potential term, what happens at the end of the initial 10-year period if renewal options are not exercised, and what are the post-termination obligations regarding location and equipment?