Can you provide detailed financial statements or Item 19 data showing revenue, expenses, and profitability ranges for different unit performance tiers, not just gross sales figures?
#1
What explains the exceptionally high advertising fund rate of 3.0% compared to industry competitors, and how is this fund allocated and audited?
#2
Given zero reported unit closures and terminations over 3 years, are there any closed or underperforming units that have been excluded from the unit count, and what defines a 'unit' in the system?
#3
Can you clarify why the Investment Cost scoring is 0/100 when a $30,000 franchise fee is charged, and what are the total startup costs including equipment, inventory, and working capital?
#4
The 2-year, 10-mile non-compete is significantly narrower than industry standard (21-50 miles). Why was this reduced, and what recourse does the franchisor have if franchisees open competing businesses outside this radius?
#5
Of the 4 unit transfers annually, are these transfers to new franchisees or internal transfers to existing franchisees? What is the approval process and transfer fee impact on existing units?
#6
What specific products or services must be purchased exclusively from franchisor-approved suppliers, and are there alternatives or competitive pricing reviews available?
#7
Can you provide examples of the 18 grounds for immediate termination without cure periods, and clarify what constitutes a 'safety violation' that triggers 72-hour termination?
#8
What is the composition of reported gross sales in the financial data—does it include revenue from required product purchases, and are there discrepancies between franchisee-reported and franchisor-tracked sales?
#9
Has the franchisor ever enforced the personal guarantee and indemnification clause against franchisees or their spouses, and are there published cases or settlements available for review?
#10
The Support & Training score is 100/100, significantly above the typical range. What specific training, ongoing support, and resources are provided, and are these services included in fees or charged separately?
#11
Why is the binding arbitration clause mandatory, and can franchisees opt for litigation instead? What is the average cost and duration of arbitration disputes in the system?
#12
Are there any pending disputes, complaints with regulatory agencies, or investigations by state franchise regulators that are not reflected in the litigation data?
#13
What operational flexibility exists regarding store hours and days of operation—are there minimum thresholds, and can franchisees operate extended or reduced hours based on market conditions?
#14
Can you provide details on the renewal process, including whether terms remain identical, fees increase, or franchisor has discretion to modify rates or operational requirements?
#15
Of the 52 current units, how many are owned by the franchisor or corporate entities versus independent franchisees, and do company-owned units report financial data under the same standards?
#16
What geographic markets or regions are currently available for new franchises, and does the exclusive territory protection prevent franchisor encroachment by opening competing units nearby?
#17
Are there any royalty reductions or incentives for high-performing franchisees, or does every unit pay the flat 6.5% royalty and 3.0% ad fund rate regardless of performance?
#18