Appell Striping & Sealcoating

The franchise fee of $35,000 is significantly lower than the typical range of $45,000-$59,900 for home services franchises. What is included in this lower fee, and are there additional startup costs not reflected in the fee structure?

Royalty rates are 8.0%, above the typical 6.0-7.0% range. How does this compare to royalty rates charged by competitors, and does it cover all franchisor support services or are there additional service fees?

The transfer fee of $5,000 is below the typical range of $7,500-$15,000. Does this lower fee apply to all transfer scenarios, and are there additional requirements or costs involved in transferring a franchise unit?

The initial contract term is 5 years, compared to the typical 10-year term for home services franchises. Why is the initial term shorter, and what are the business implications if a franchisee wants long-term commitment?

Total potential contract term is 10 years (1 initial + 1 renewal), below the typical 15-20 years. What happens after the single 5-year renewal period expires—can franchisees negotiate additional renewals?

The contract specifies 25 termination causes, above the typical range of 14-21. Can you provide a detailed list of all termination causes and clarify which are performance-based versus subjective?

In 2024, 1 unit was terminated by the franchisor. What were the specific reasons for this termination, and does this reflect ongoing system issues or an isolated incident?

The system grew from 1 unit to 9 units in 3 years (108% CAGR). How many of these new units are from the original franchisor support versus recruited franchisees, and what is the retention rate for original franchisees?

The non-compete clause covers 2 years and 25 miles. Is this enforced post-termination or only post-successful exit, and what is the franchisor's track record enforcing non-competes?

Personal guarantees are required from all stockholders or members. If I operate as an LLC with multiple members, does each member need to sign the personal guarantee?

Minimum royalty and advertising payments are required regardless of sales levels, with 1.5% monthly interest on late payments (18% annually). What is the typical grace period before interest accrues, and have franchisees experienced difficulty meeting minimum payments?

The contract requires compliance with 9 renewal conditions. Can you specify these conditions and clarify whether they involve capital investments, equipment upgrades, or system updates at the franchisee's expense?

Renewal requires meeting 'current system standards,' but the franchise is only 3 years old. How does the franchisor define and communicate system standards updates, and have previous standards changes required significant franchisee investment?

The $2,500 renewal fee is charged to continue past year 5. Are there additional costs required before renewal is approved, such as facility updates or equipment replacements?

Item 19 financial performance data is provided. What percentage of current franchisees meet or exceed the average unit volumes disclosed, and are there significant performance variations by territory?

Since the franchise is very young (only 9 units), how many franchisees have been operating for the full 3-year history, and are any of the early franchisees still in the system?

What specific support, training, and marketing assistance is provided during the initial 5-year term, and how does this change if a franchisee enters a renewal period?

The indemnification clause requires franchisees to defend the franchisor. Can you clarify what types of franchisor actions would trigger franchisee indemnification obligations and provide examples?

Of the 11.1% termination rate, were the terminations franchisor-initiated for cause, mutual agreement, or franchisee voluntary cessation, and was legal action involved in any cases?

What is the franchisee's experience with territory protection—has the franchisor added competing units within the 25-mile non-compete area or modified territory boundaries post-award?