What specific circumstances led to the 1 unit termination in 2024, and what contract violations or performance issues were involved?
#1
Your 3-year growth rate of 48.7% significantly exceeds the typical range for fitness franchises—what factors are driving this rapid expansion, and is this growth sustainable?
#2
Why does your termination rate of 2.2% exceed the typical range of 0.0-1.7% for fitness franchises, and what performance benchmarks trigger termination?
#3
Your median gross sales of $733,106 and bottom quartile sales of $564,808 both exceed typical ranges—are these figures reflective of all unit types, or only certain locations/formats?
#4
The 10 renewal conditions exceed the typical range of 7-9—can you itemize all 10 conditions and clarify the cost implications of mandatory refurbishment?
#5
What is the estimated cost of the mandatory refurbishment and repair work required as a condition of renewal after 10 years?
#6
Given the personal guarantee requirement that extends to spouses and covers all agreement provisions, how have disputes been handled when franchisees have claimed inability to comply with certain operational directives?
#7
The franchisor maintains control over 5 supplier categories—can you identify which suppliers are mandatory and what percentage of total unit costs they represent?
#8
Has the franchisor used its supplier control authority to change approved vendors, and if so, how did this impact franchisee profitability?
#9
Zero litigation cases in 3 years is unusual—do you have informal dispute resolution mechanisms, and what percentage of disputes are resolved outside formal litigation?
#10
With only 46 current units, how many units were opened in 2023 and 2024 versus prior years to achieve the 84% single-year growth?
#11
What is the average payback period reported by franchisees, and does this vary significantly by unit location or format?
#12
The renewal fee is $10,000—does this fee apply to both the first renewal (year 10) and the second renewal (year 15)?
#13
What percentage of franchisees who reached their initial 10-year renewal point chose to renew versus exit, and why did those who exited choose not to continue?
#14
Can you provide examples of specific renewal conditions that franchisees found most costly or difficult to satisfy?
#15
The transfer fee equals the renewal fee at $10,000—are there circumstances where transfer approval is withheld, and what are the criteria?
#16
With a 2-year/15-mile non-compete, how strictly has the franchisor enforced this in practice, and are there documented cases of enforcement?
#17
How many units have transferred (4.3% rate) versus closed or been terminated, and what are the primary reasons franchisees seek to transfer their units?
#18
Does your Item 19 financial performance data include unit-level expenses breakdown, or only gross sales figures, and can franchisees receive individual unit P&L data during due diligence?
#19
The termination rate of 2.2% exceeds typical for your category—are terminations concentrated in certain geographic regions, unit ages, or under specific ownership types?
#20