The transfer fee of $20,000 exceeds the typical range for food and beverage franchises by approximately $2,500-$12,500. What justifies this higher fee compared to competitors, and is it negotiable?
#1
Your average unit volumes significantly exceed category norms by approximately $739,000 across the system. What percentage of franchisees achieve sales within the top and bottom quartile ranges reported, and what factors drive this performance variation?
#2
The renewal agreement requires achieving gross sales of at least 75% of the system average during the final 12 months of the current term. Given your current system average of approximately $1,728,248, what support or remediation is available to units falling below the $1,296,186 threshold?
#3
The total potential contract term of 30 years exceeds typical food and beverage franchises. Under what conditions might the franchisor decline to renew at the end of the initial 10-year term or subsequent renewal periods?
#4
What specific mandatory remodeling and modernization investments are required at renewal, and what is the estimated cost range for these upgrades?
#5
Can you provide details on the 2 units that 'ceased other' in 2024 beyond closures and terminations? What circumstances led to their exit?
#6
The franchise agreement includes a 2-year non-compete with no geographic mileage radius specified. How is this restriction interpreted and enforced geographically, and could a franchisee operate in adjacent markets after exit?
#7
What training and support mechanisms are in place to help underperforming units improve toward the 75% renewal threshold before the end of their initial term?
#8
Late payments carry interest at 1.5% monthly (18% annually). Are there any grace periods, cure rights, or hardship provisions before interest accrual begins?
#9
The franchisor retains sole discretion to choose between arbitration or state court litigation in Orange County, Florida. Has this provision created any practical barriers to dispute resolution, and what is the typical cost to franchisees for legal proceedings?
#10
Personal guarantees are required from all beneficial interest holders. If a franchisee sells majority interest to a new operator, are updated personal guarantees required and do they release the original guarantors?
#11
The agreement allows immediate termination for payment defaults with a 5-day cure period. Over the past 3 years, how many franchisees have received payment default notices, and how many were cured within the 5-day window?
#12
What is your policy regarding franchisees who fall below the 75% system average sales threshold during their initial term? Are there mandatory actions, additional training, or termination triggers?
#13
Given the protected territory with encroachment protection but no exclusivity, under what specific circumstances could the franchisor open a company-operated or franchised unit in close proximity to an existing franchisee?
#14
The financial data shows zero terminations and zero non-renewals in the past year. Are there any franchisees currently in remediation plans or under performance monitoring that might not be captured in these metrics?
#15
What percentage of the 101 current units have been through at least one renewal cycle, and what was the renewal rate for franchisees whose initial 10-year term has concluded?
#16
The system grew from 79 to 101 units over 3 years while maintaining very low exits. What percentage of this growth came from new franchisees versus existing operators opening additional units?
#17
Class action waivers are included in the franchise agreement. If multiple franchisees experience similar disputes, what recourse mechanisms exist outside of individual arbitration?
#18