The ad fund rate is 1.0%, which is below the typical 1.5-3.0% range for food and beverage franchises. How is the advertising fund utilized, and what marketing support do franchisees receive for this rate?
#1
With only 4 total units in the system, what is the franchisor's growth strategy and timeline for expansion?
#2
The franchise has zero litigation history. Has the franchisor or any franchisees experienced disputes that were resolved outside the formal litigation process?
#3
Termination causes are listed as 14 categories. Can you provide a detailed breakdown of what constitutes non-curable defaults that would allow immediate termination without cure periods?
#4
The total potential term of 25 years exceeds the typical range. What are the specific renewal conditions required after the initial 10-year term, and are there any performance benchmarks or financial requirements?
#5
You offer only 5 renewal conditions versus the typical 7-9. What flexibility exists for franchisees regarding facility upgrades, menu changes, or operational modifications during renewal negotiations?
#6
The franchise agreement includes personal guarantees from all owners. Are there circumstances where personal guarantees can be released or modified after successful operation?
#7
The binding arbitration clause requires disputes to be resolved at the franchisor's headquarters location. What are the typical costs and timelines for arbitration under this arrangement?
#8
Operational control restricts 6 supplier categories including real estate and POS software. Can you provide the approved supplier list and explain how pricing is negotiated or controlled?
#9
With zero unit exits over 3 years, do you have any units that have been actively marketed for sale or transfer? If so, what were the asking prices?
#10
The transfer fee is $10,000. Are there any additional approval or processing requirements beyond this fee when a franchisee sells their unit?
#11
What training and ongoing support does the franchisor provide, and are there additional costs beyond the monthly technology fee of $150?
#12
Item 19 shows average gross sales of $468,131 and median of $479,614. How many units reported this data, and does this represent annualized sales from all 4 current units?
#13
The non-compete clause is 2 years/5 miles. Does this apply if a franchisee's unit is terminated by the franchisor for any reason?
#14
Are there circumstances where the franchisor can add new units within an existing franchisee's territory, and what encroachment protections exist?
#15
What are the 14 non-curable default categories, and are there any that relate to subjective franchisor interpretation such as 'brand standards' or 'customer satisfaction'?
#16
The franchise has maintained exactly 4 units for 3 years with no growth. What explanation is provided for the lack of unit expansion, and are there plans to increase the franchise network?
#17
Given the indemnification clause, what insurance requirements or liability caps exist for franchisees, and are there any limitations on the franchisor's indemnification obligations?
#18