Can you provide detailed reasons for the 3 unit closures and 1 other exit in 2023? Were these owner-initiated, market-related, or due to operational challenges?
#1
Given the 30.0% 1-year turnover rate, significantly above the typical 0.0-10.0% range, what support or corrective actions has the franchisor implemented to address unit sustainability?
#2
The system grew from 7 units (2021) to 12 units (2022) but declined to 10 units (2023). What is the franchisor's growth strategy and unit development pipeline for the next 3 years?
#3
Why is the transfer fee of $22,500 substantially higher than the typical range ($8,750-$20,000)? Are there specific conditions or services included that justify this premium?
#4
The System Health score is 0/100, the lowest possible rating. What specific operational, financial, or management deficiencies does this reflect, and what improvement plans exist?
#5
With a Risk Factors score of 35/100 (below the typical 64.0-80.0 range), what are the primary risk factors affecting franchisees, and how does the franchisor mitigate these risks?
#6
Can you explain why the franchise fee is $30,000, below the typical $35,000-$40,000 range? Does this lower fee correlate with reduced franchisor support or training?
#7
The contract requires all food and beverage purchases from the franchisor or approved suppliers only. What is the franchisor's markup or margin on these supplied products, and how does pricing compare to local suppliers?
#8
Given the non-compete clause of 2 years within 10 miles, what happens if a franchisee's location closes—are they still restricted from competing in that territory?
#9
You mention encroachment protection despite territory not being marked exclusive. What specific protections prevent the franchisor from opening nearby company-owned or franchise locations?
#10
What was the financial performance of the 3 units that closed in 2023? Did they fail to meet minimum sales thresholds, or were closures due to other factors?
#11
The Item 19 average gross sales of $1,105,242 is provided, but what percentage of franchisees achieve or exceed this figure? What is the median or range of sales performance?
#12
How many of the current 10 units have been operating for at least 2 years? This helps assess whether the system is establishing sustainable unit economics.
#13
The renewal fee is $3,000. Are there any other fees, training requirements, or system upgrades required upon renewal of the 10-year initial term?
#14
With binding arbitration, class action waiver, and jury trial waiver clauses, what recourse do franchisees have if disputes with the franchisor arise regarding royalty charges or operational disputes?
#15
Does the franchisor require personal guarantees from spouses in all cases, or only when spouses are principal owners? What liability do spouses assume?
#16
Has the franchisor pursued any litigation against franchisees not reflected in the reported 0 cases? Are there any confidential settlements or arbitrations in the past 3 years?
#17
With operating hours subject to franchisor approval, how flexible is the schedule for franchisees in different markets? Have any franchisees requested schedule changes and been denied?
#18
What training and ongoing support are provided given the Support & Training score of 90/100? How many training days are included at initial setup and annually?
#19
Why does the Investment Costs score of 88/100 fall above the typical range (73.0-77.25)? What are the total initial investment requirements beyond the $30,000 franchise fee?
#20