Item 19 financial performance data is referenced as available—can you provide the specific median and average gross sales figures, along with the number and percentage of units reporting, to assess realistic unit economics?
#1
The franchise has achieved 115.4% 3-year CAGR and 150% 1-year growth—what is driving this exceptional expansion rate, and is this growth sustainable or tied to specific market conditions?
#2
The Ad Fund rate of 3.0% is above the typical 1.0-2.0% range for your category—how is this fund allocated, what specific marketing activities does it support, and how is its use justified to franchisees?
#3
The monthly Technology Fee of $750 is significantly above the typical $122-474 range—what specific technology systems and services does this cover, and can it be itemized in the franchise disclosure?
#4
The Transfer Fee of $2,500 is substantially below the typical $7,400-$20,000 range for childcare franchises—what does this fee cover, and why is it priced lower than comparable systems?
#5
The Non-Compete restriction is 1 year and 10 miles, compared to the typical 2-year restriction for your category—why is this shorter, and what prevents franchisees from immediately opening competing operations after exit?
#6
With zero reported exits, terminations, or transfers, can you provide details on any franchisees who have expressed concerns, requested early termination discussions, or faced performance challenges?
#7
The franchise agreement includes 16 non-curable defaults allowing immediate termination—can you identify which specific operational or financial defaults trigger this clause, and have any been invoked?
#8
Mandatory binding arbitration in the franchisor's county is required for disputes—how many dispute resolution proceedings have occurred in the past 3 years, and what were the outcomes?
#9
Personal guarantees from principal owners are unlimited in scope—can you clarify what obligations are NOT covered by the guarantee, and have any guarantees been enforced against franchisees?
#10
Minimum performance requires $125,000 gross revenue in Year 2—what percentage of franchisees achieve this target, and what support or penalties apply to those falling short?
#11
Late payment interest is set at 18% annually—under what circumstances are franchisees charged late fees, and has this been applied to any franchisees in the past 3 years?
#12
Mandatory upgrades are referenced as a renewal condition—what specific upgrades are currently required, what is their typical cost, and when were they last implemented?
#13
Spouse guarantees may be required—in what circumstances does the franchisor require both spouses to guarantee the franchise agreement, and what are the implications if a guarantor wants to withdraw?
#14
General Liability Insurance of $1,000,000 is required—are you required to name the franchisor as an additional insured, and can you provide evidence of prior claims against franchisees under their policies?
#15
The renewal fee is 20% of the then-current initial franchise fee (estimated at $7,700)—has the franchise fee been increased since launch, and if so, what was the increase?
#16
Only 1 renewal option for 10 years is offered—what happens at the end of the potential 20-year term, and can franchisees negotiate additional renewal periods?
#17
With only 10 current units all operating successfully, how long has the oldest franchisee been operating, and can you provide contact information for at least 3 franchisees for reference calls?
#18