The technology fee of $100/month is significantly below the typical range for this franchise type. What specific services and tools are included in this fee, and are there circumstances under which fees could increase?
#1
Can you explain the spike in unit closures from 4 closures in 2022 to 15 closures in 2023? What were the primary reasons for the 2023 increase, and what changes were made to prevent recurrence?
#2
You have 2 pending litigation cases and 6 total cases on record. What are the natures of the two pending cases, and what is the expected timeline for resolution?
#3
The franchise agreement lists 25 termination causes, which is above the typical range. Can you clarify which of these 25 causes are considered non-curable defaults with no opportunity to remedy?
#4
With 11 renewal conditions (above the typical range of 6-9), what are the most frequently negotiated or waived conditions, and what is the typical cost to satisfy the remodeling/refurbishment requirement mentioned in the renewal clause?
#5
The system shows very strong financial performance compared to peers. What percentage of the 363 current units achieved the median gross sales of $1,642,093, and what is the range of profitability across units?
#6
Can you provide details on the 2 cases you initiated as franchisor? Were these related to franchise violations, non-payment, or other operational issues, and were they resolved or are any still pending?
#7
What encroachment protections are explicitly included in the franchise agreement, and have you enforced these protections in any situations over the past 3 years?
#8
The transfer fee is $10,000 and renewal fee is $5,000. Are these fees typically charged to franchisees, and are there circumstances where they might be waived or negotiated?
#9
With a 3.7% annual exit rate and a termination rate of 2.5%, can you break down how many units have been terminated by the franchisor versus voluntarily transferred or closed over the past 3 years?
#10
The non-compete clause specifies 2 years and 40 miles. How is this enforced, and are there documented cases where you have pursued legal action against franchisees who violated this clause post-exit?
#11
Support & Training scores 78/100, which is slightly below the typical range of 79-90. What specific training and ongoing support are provided, and are there plans to enhance these programs?
#12
What is the typical experience and background of franchisees who achieve top quartile sales of $7.2+ million versus those in the bottom quartile at approximately $457,000?
#13
The franchise agreement requires purchasing from expressly approved vendors only. How many approved vendors are available for the primary service categories, and have any disputes arisen regarding vendor restrictions?
#14
You mention mandatory binding arbitration at a JAMS office in Columbia, Maryland. How many disputes have proceeded to arbitration, and what has been the average cost and timeline for resolution?
#15
With personal guarantees required from all individuals owning 5%+ equity, how does this affect franchisee financing options, and do most lenders require additional collateral beyond the personal guarantee?
#16
The franchise fee of $43,000 is below typical market range. Does this lower initial fee structure relate to the higher ongoing royalty rate of 6.0%, and are there any promotional periods or conditions that affect pricing?
#17
Can you provide the names and contact information for at least 15 current franchisees in various geographic markets so I can conduct independent reference calls about system experience?
#18