The system grew from 5 units in 2022 to 155 units in 2024. What was the primary driver of this explosive growth, and how many of these new units came from new franchisee recruitment versus existing franchisee multi-unit development?
#1
Terminations increased from 2 in 2023 to 14 in 2024. What specific issues led to these 14 terminations, and were they concentrated in particular geographic regions or franchisee cohorts?
#2
Your monthly technology fee of $792 is significantly higher than the typical range of $156.50-$599.00 for home services franchises. What specific services and tools does this fee provide, and is this fee fixed or does it scale with revenue?
#3
Your advertising fund rate of 3.0% exceeds the typical range of 1.0-2.0%. How is this additional fund allocated, and can franchisees audit how their advertising contributions are spent?
#4
You have 1 pending litigation case. What is the nature of this case, who initiated it, and what is the timeline for resolution?
#5
Your franchise agreement specifies 14 non-curable defaults with immediate termination rights but only 2 curable defaults with cure periods. Can you provide examples of what constitutes each category, and are there circumstances where non-curable defaults might be waived or negotiated?
#6
The renewal fee equals 20% of the then-current initial franchise fee ($11,900 based on current $59,500 fee). If your initial franchise fee increases in the future, would renewals trigger a higher renewal fee, and how is the renewal fee determined at the time of renewal?
#7
Your agreement requires a minimum monthly royalty of $500 beginning on the one-year anniversary regardless of actual revenue. How many franchisees typically have gross sales that fall below the threshold where this minimum royalty exceeds their percentage-based royalty?
#8
Late payment interest is set at 1.5% monthly (18% annually). Has this penalty been applied frequently, and what is the average payment delay for franchisees?
#9
You report investment cost score of 69, below the typical range of 74.0-75.0. What specific investment requirements are included in your initial franchise fee, and what is the average total investment range including working capital?
#10
Your support and training score of 93 is above the typical range of 79.0-90.0. What specific training programs and ongoing support distinguish your offering, and how is this support delivered and measured?
#11
Your non-compete is 2 years within 25 miles of the protected territory or any other protected territory. If a franchisee operates in multiple territories, does this create stacking restrictions that could limit their post-franchise activities across all their service areas?
#12
The termination clause allows only 15 days to cure most curable defaults. For operational issues like quality control or training compliance, is 15 days sufficient for most franchisees to remedy the situation, or do extensions ever occur?
#13
Top quartile franchise sales are $795,952, which falls below the typical range of $837,064-$2,502,201. What factors explain why your top-performing franchisees' sales fall below peer benchmarks?
#14
Median gross sales of $392,204 suggest high variation in franchisee performance. What is the percentage of franchisees operating below break-even, and what is the typical payback period for initial investment?
#15
You have encroachment protection but the territory is not exclusive. How do you define and enforce encroachment, and have there been disputes between franchisees regarding territory boundaries?
#16
Of the 14 terminations in 2024, how many were initiated by the franchisor versus requested by franchisees, and what was the franchisee retention rate among units that reached their first renewal point?
#17
The Item 19 financial performance disclosure provides sales data. Can you clarify how many franchisees reported data for the median and average sales figures, and what percentage of your system is included in this sample?
#18
Personal guarantees are required from franchisees, spouses, and principal shareholders. In the event of franchisee termination and litigation, how often has the franchisor pursued personal guarantees against individual signatories?
#19
Your agreement requires indemnification by franchisees for franchisor liability. What types of claims have been covered under indemnification in past disputes, and are there caps on franchisee indemnification obligations?
#20