AR Homes

The franchise fee of $65,000 is above the typical range for home services franchises. What specific services, training, or resources justify this premium pricing compared to competitors?

Your royalty rate of 4.25% is significantly lower than the typical 6.0-7.0% range, yet your technology fee of $1,000 monthly is substantially higher than typical ($156-$599). How do these fees relate to services provided, and what is included in the technology fee?

The franchise system closed 5 units and terminated 5 franchisees in 2023—a marked increase from other years. What specific issues led to these terminations, and are similar issues still present in the current franchisee base?

System units have declined from 46 to 42 over 3 years with zero growth in the past year. What is the franchisor's growth strategy, and what factors are attributed to the decline?

Two lawsuits have been initiated against the franchisor in the past 3 years, with one currently pending. What are the subject matters of these cases, what is the timeline and expected outcome of the pending case, and how have prior cases been resolved?

Median unit sales of $10.4 million appear significantly higher than typical home services franchises. Are these figures representative across all units, or driven by a small number of outliers? What is the range of unit sales performance?

The non-compete restriction of 3 years exceeds the typical 2-year range. Given that your territory is protected but not exclusive, why is a longer non-compete necessary?

Your agreement provides for a 50% renewal fee based on the then-current franchise fee. If the franchise fee increases, how would this impact renewal costs for existing franchisees?

What percentage of the 42 current units are operating profitably, and what is the average franchisee tenure? How many units have terminated early versus completed their initial terms?

The termination clause allows for a 30-day cure period, extendable to 90 days for complex defaults. What are examples of defaults that would be classified as 'complex,' and how is this determination made?

Personal guarantees are required from all owners and spouses with unlimited indemnification obligations. What specific scenarios would trigger indemnification claims, and have there been any indemnification actions against franchisees?

The agreement requires mandatory minimum royalty payments beginning 18 months after signing, with 18% annual interest on late payments. What is the amount of the minimum annual royalty, and what percentage of franchisees meet this obligation?

Transfer approval requires meeting 13 conditions and grants the franchisor a 30-day right of first refusal. In practice, what percentage of transfer requests are approved, and has the franchisor exercised its right of first refusal?

How many franchisees have opted to not renew at the end of their initial 10-year term, and what are the primary reasons cited for non-renewal?

The support and training score of 100 is exceptional compared to typical franchises. What specific training and ongoing support differentiates AR Homes, and how is this support measured for quality and effectiveness?

Given the franchise's high gross sales figures, what is the typical franchisee net profit margin after royalties, technology fees, advertising contributions, and other obligations?

The investment score of 24 is significantly below the typical 74-75 range. What is the full initial investment required (excluding franchise fee), and what explains the discrepancy from category norms?

Are there any ongoing litigation cases or regulatory investigations involving the franchisor that are not disclosed in public litigation records?

The agreement requires participation in mandatory programs with associated costs. What are these mandatory programs, what are the typical annual costs, and can franchisees opt out of any of them?

What percentage of franchisees achieve the median gross sales figure of $10.4 million, and how many fall below it? What support exists for underperforming units?