The franchise fee of $25,000 is significantly lower than the typical range of $39,500-$55,000 for sports and recreation franchises. What accounts for this below-market pricing, and are there plans to adjust this fee?
#1
Given the franchise has only 3 units with a 3-year history, what is the franchisor's target growth rate over the next 5 years, and what support systems are in place to manage rapid expansion?
#2
The non-compete radius of 50 miles is double the typical range for this category. How was this distance determined, and what is the rationale for the broader geographic restriction?
#3
With 9 renewal conditions reported (above the typical 6-8), can you provide a detailed list of all conditions that must be met for franchise renewal, and what is the failure rate for renewals?
#4
The total potential contract term of 30 years (10 initial + 2 × 10 renewals) exceeds the typical 20-year maximum. What happens if a franchisee wishes to exit before the end of their initial 10-year term?
#5
Can you explain the structure and reasoning behind the 9 renewal conditions, and provide examples of franchisees who have failed to meet renewal requirements?
#6
The transfer fee of $5,000 is below market. Are there any other costs or approval processes associated with transferring a franchise that are not reflected in this fee?
#7
With zero reported litigation over 3 years, can you confirm whether this reflects genuinely no disputes, or whether disputes were resolved through the mandatory arbitration clause without formal documentation?
#8
Given the mandatory arbitration requirement and individual-only dispute resolution (no class actions), how many franchisees have pursued arbitration against the franchisor, and what were the outcomes?
#9
The financial obligations clause mandates minimum royalty payments regardless of sales levels. What is the typical minimum royalty amount, and how frequently do franchisees fall short of projected sales?
#10
Late payment interest is listed at 0.5% per week (26% annually). Can you provide examples of how often franchisees incur late fees, and what the average accumulated interest charges are?
#11
All owners and spouses must provide personal guarantees covering financial obligations. How many franchise agreements are currently in place, and have any personal guarantees been enforced?
#12
Can you provide detailed unit-level financial data for all 3 current franchisees, including gross sales, net profit, and operating expenses, to verify the reported average of $887,544?
#13
The termination clause allows franchisor action for monetary defaults with only a 10-day cure period. How many franchisees have received termination notices for any violations, and what were the outcomes?
#14
Since the system has grown from 1 to 3 units in 3 years with zero closures, are there any upcoming unit openings or closures planned that prospective franchisees should know about?
#15
What training and ongoing support is provided, and how does the franchisor ensure quality and brand consistency across such rapid growth?
#16
The renewal fee of $2,500 is charged at renewal. Are there any other renewal-related costs such as updated equipment, facility upgrades, or rebranding expenses required?
#17
Given the exclusive territory protection, how are territory boundaries defined, and what happens if demand grows beyond a single franchisee's capacity in their exclusive area?
#18