The franchise agreement shows a total potential term of 0 years with renewal options listed as -1 x 5 years—can you clarify what renewal rights franchisees actually receive after the initial 5-year term?
#1
Your system experienced approximately 48 unit closures in 2024 and 50 in 2022, representing a 14.2% annual turnover rate. What are the primary reasons franchisees are exiting, and what is the franchisor doing to address these closure patterns?
#2
The closure data shows consistent high exit rates but a relatively low termination rate of 4.7%. How many of the closures in the past 3 years were voluntary exits by franchisees versus other causes?
#3
Your contract lists 24 termination causes, which exceeds the typical range of 15-23 causes for this franchise category. Can you provide a detailed breakdown of which termination clauses are most frequently invoked?
#4
The non-compete restriction covers 20 miles, which is below typical industry range. Why did you choose a 20-mile radius rather than the more standard 21-25 mile range used by comparable franchises?
#5
The 1 litigation case filed against the franchisor—what was the nature of that dispute, what was the outcome, and has it been fully resolved?
#6
Your technology fee of $200 monthly is below the typical range ($225-$586.25). Does this fee cover all required software and systems, or are there additional technology or software costs franchisees must pay separately?
#7
The Item 19 shows average gross sales of $906,320 but median sales of $655,298—what percentage of franchisees achieved the average versus median performance level, and what is the distribution of sales performance across the system?
#8
How many franchisees reported financial data for Item 19, and what percentage of your total system units does this represent?
#9
The franchise agreement requires personal guarantees from all equity owners and their spouses and includes a 2-year non-compete with 20-mile radius coverage. Can you explain the rationale for requiring spouse guarantees?
#10
Has the system experienced any mass closures during economic downturns, or has the 14.2% annual turnover been consistent regardless of market conditions?
#11
You offer exceptional training and support (scored 100/100 vs. typical 78-94). Can you specify what training hours, ongoing support resources, and technology platforms are included versus what franchisees must pay extra for?
#12
The transfer fee is $25,000, which equals the initial franchise fee. Is this fee refunded if the franchisor denies the transfer, and what percentage of transfer requests are typically denied?
#13
What happens at the end of the initial 5-year term if renewal options are not exercised—can the franchisee continue operating, or must they cease operations?
#14
Given the elevated turnover rate of 14.2% and 3-year rate of 40.1%, what is the franchisee satisfaction score or NPS (Net Promoter Score) for your system?
#15
The contract shows 'Territory Exclusive: False'—does this mean the franchisor can place another Brightway franchisee within a franchisee's service area, and have there been encroachment issues or complaints?
#16
The 20% royalty rate plus 3% ad fund totals 23% in ongoing fees. Are there any other mandatory fees, assessments, or contributions beyond these two percentages that franchisees must pay?
#17
What specific support mechanisms exist to help struggling franchisees before termination or closure becomes necessary, particularly given the high closure rates?
#18