Given the transfer fee of 48,750 is nearly equal to the initial franchise fee of 49,900, how does this compare to typical transfer costs in the estate sales industry, and what justification is provided for this high fee?
#1
The franchise has grown from 1 to 2 units with zero exits. How many franchisees have inquired about transfers or early termination since inception, and were any discouraged by the transfer fee structure?
#2
Can you provide the names, contact information, and approval for me to speak with both existing franchisees independently about their experience and financial performance?
#3
The financial performance data shows average gross sales of 596,362, but what is the range of sales across franchisees, and how many units are included in this average?
#4
What are the 11 non-curable defaults that allow immediate termination without a cure period, and are any of them common operational challenges in this business model?
#5
The agreement specifies minimum gross revenue requirements. What are these thresholds, how are they enforced, and what happens if a franchisee falls short?
#6
Given the 2-year, 30-mile non-compete applies both to the franchisee's territory and any other existing franchise location, how is this interpreted if the system rapidly expands and a location opens within 30 miles during your operating term?
#7
The renewal fee is 10% of the then-current initial franchise fee, capped at 6,500. If the initial franchise fee increases to 75,000 before your first renewal, does the 6,500 cap still apply, or can the fee exceed this amount?
#8
Can you explain the binding mandatory arbitration clause and class action waiver? Are there any circumstances where I could pursue litigation in court rather than arbitration?
#9
The agreement mentions 4 curable defaults with cure periods (10 days for revenue reporting, 30 days for other defaults). Can you provide examples of each type of default and instances where franchisees have been cured vs. terminated?
#10
What support, training, and ongoing operational assistance is provided, and how is this reflected in the 6.5% royalty rate and 2.0% ad fund?
#11
The tech fee is 200 (appears to be monthly based on typical structure). What technology platform is included, and can franchisees opt out or use alternative systems?
#12
What percentage of the $49,900 initial investment goes toward inventory, equipment, and working capital versus initial fees and franchisor costs?
#13
How are disputes with the franchisor handled under the binding arbitration clause, what are typical costs, and are arbitration decision outcomes available for review?
#14
Given the only 2 current franchisees, what is the franchisor's growth target for the next 3-5 years, and what geographic areas are targeted for expansion?
#15
Can you provide audited or reviewed financial statements for the franchisor for the past 2-3 years to assess the parent company's financial stability?
#16
The personal guarantee covers 'all obligations, both monetary and performance-based.' What does this mean if the franchise becomes unprofitable—could the franchisor pursue personal assets?
#17
How frequently are franchisees required to report revenue, and what happens if reporting is late or inaccurate beyond the 10-day cure period?
#18
Are there any franchisees who have attempted to renew, and did all meet the 5 renewal conditions without renegotiation of terms?
#19