Of the 22 units that closed between 2022-2024 (8+6+8 closures), how many were attributable to franchisee decision to exit versus franchisor action, and what were the primary stated reasons for closures?
#1
Given the 11.6% annual exit rate and 20.7% three-year turnover rate, what specific operational or market challenges is the franchisor addressing to stabilize unit retention?
#2
How does the franchisor define and categorize the 'Ceased Other' closures (5 in 2022, 4 in 2023, 7 in 2024)—what circumstances led to these exits?
#3
Can you provide the breakdown of remaining 65 units by performance tier (top/middle/bottom quartile by revenue) to understand which unit profiles are most at risk of closure?
#4
The system lost 4 net units in the past year while reporting only 4 transfers and 0 terminations—does this indicate voluntary closures are accelerating?
#5
What support or intervention programs does the franchisor offer to underperforming units before they reach closure, and how many units are currently in such programs?
#6
Given that the non-compete clause is only 1 year and 50 miles (compared to the typical 2 years and 10-25 miles), how many former franchisees have opened competing supplemental education services within 1 year post-closure, and in what geographic areas?
#7
The Investment score of 65 is below the typical 75.0 for this category—what capital expenditures or working capital have franchisees required beyond the $45,000 franchise fee in their first year?
#8
With System Health scoring only 26 (far below the 50.0-75.0 typical range), what specific metrics or operational issues drive this low score, and what is the franchisor's remediation plan?
#9
Can you provide Item 19 data broken down by franchise age (units opened 0-1 years, 1-3 years, 3-5 years, 5+ years) to show whether underperformance is concentrated in newer or mature units?
#10
The Ongoing Fees score of 61 is below typical—are there any additional fees beyond the stated 8% royalty, 2% ad fund, and $154 technology fee that franchisees should anticipate?
#11
What is included in the monthly $154 technology fee, and has this fee increased since the franchise agreement was signed?
#12
How many disputes or complaints has the franchisor received in the past 3 years, even if not pursued to litigation, given the requirement for binding arbitration in Delaware?
#13
Given the binding arbitration requirement in Wilmington, Delaware with a 1-year statute of limitations, what is the average cost and timeline for arbitration cases brought by franchisees?
#14
The personal guarantee and spousal liability requirements apply to owners with 10%+ ownership—how have these been interpreted and enforced in prior disputes or closures?
#15
Can you provide examples of the 11 curable defaults and 8 non-curable defaults with typical timeframes franchisees are given to cure payment or operational breaches?
#16
With exclusive territory protection confirmed, have there been any encroachment disputes in the past 3 years, and how were they resolved?
#17
What is the renewal process and timeline for the 1 renewal option (5 years), and what percentage of franchisees historically exercise renewal versus allow franchise agreements to expire?
#18
The Risk Factors score of 63 is below the typical 70.25-80.0 range—what specific operational or market risks does the franchisor identify as most critical for franchisees to understand?
#19
Are there any geographic markets or regions where Brain Balance franchises have experienced significantly higher closure rates, and should unit location be factored into site selection due diligence?
#20