Given that Ceiling Guru has only 1 franchise unit, how does the franchisor plan to grow the system, and what are the realistic expansion targets for the next 3-5 years?
#1
The median gross sales of $50,516 are substantially below the typical range of $286,628-$1,008,179 for home services franchises. Can the franchisor provide a detailed breakdown of revenue sources and explain this significant variance?
#2
With only 1 unit in the system, what is the statistical significance and reliability of the financial performance data provided in Item 19, and has this single unit been operating profitably?
#3
The termination causes count of 11 is below the typical range of 14-21 for this franchise category. Are there any omissions in the termination causes listed in the franchise agreement?
#4
Can you provide details on how the franchisor selects, vets, and supports franchise candidates given the extremely limited system size?
#5
What happens to franchisees' non-exclusive territory protection if the franchisor's system remains at 1 unit or experiences contraction?
#6
Given the required personal guarantees from all owners covering all franchisee obligations, how extensive is the franchisor's indemnification scope, and what specific types of losses could trigger the franchisee's liability?
#7
The agreement specifies 4 curable defaults versus 11 non-curable defaults. Can you identify all 11 non-curable defaults and the specific circumstances under which the franchisor would exercise immediate termination rights?
#8
What is the justification for the $10,000 transfer fee and $5,000 renewal fee given the minimal system infrastructure supporting only 1 current franchise unit?
#9
The post-term non-compete restriction lasts 2 years within 25 miles of the franchisee's site or any other system franchisee's protected territory. Given there is currently only 1 unit, how would this 25-mile radius restriction be enforced if additional units are never added?
#10
Can you explain why the Risk Factors score of 80 significantly exceeds the typical range of 58-76 for home services franchises, and what specific risks does this score reflect?
#11
How long has the current single franchise unit been operating, and what was the basis for its establishment or acquisition by the franchisor?
#12
What support and training does the franchisor provide to new franchisees, and how does this compare to multi-unit home services franchise systems?
#13
Are there any documented communication channels or disputes between the current franchisee and franchisor that prospective franchisees should be aware of?
#14
The Ongoing Fees score of 60 falls at the lower boundary of the typical range. How frequently are the technology fee, royalty rate, and ad fund rate reviewed and adjusted?
#15
Can you provide references from the current franchisee regarding their experience with system support, fee fairness, and profitability expectations?
#16
What is the franchisor's experience and track record in other business ventures outside of Ceiling Guru, and how is operational expertise demonstrated?
#17
Given the 5-day cure period for financial defaults, what triggers the franchisor to classify a default as 'non-curable' rather than allowing additional cure time?
#18
The agreement requires a 30-day cure period for operational defaults. Can you provide examples of what qualifies as an operational default versus a financial default?
#19
How does the franchisor define and measure 'losses directly or indirectly arising from business operation' under the indemnification clause, and are there any caps on franchisee liability exposure?
#20