The franchise fee of $50,000 is above the typical range for this category. What specific startup costs and support are included in this fee compared to competitors?
#1
Your ad fund rate of 4.0% is notably higher than the typical 1.5-3.0% range for fast casual restaurants. How is this fund allocated between digital marketing, local store marketing, and national campaigns, and what ROI benchmarks should franchisees expect?
#2
The 1-year turnover rate of 27.3% is exceptionally high. Can you provide details on the 3 units that were terminated in 2024 and the specific reasons for termination?
#3
All exits in 2024 were franchisor-initiated terminations. What are the 12 non-curable defaults listed in the franchise agreement that could trigger immediate termination without opportunity to cure?
#4
Your 3-year compound annual growth rate of 22.4% suggests rapid expansion, but unit count only grew from 6 to 11 units. How many units were opened and closed during this period to achieve this growth rate?
#5
Non-compete restrictions of 1 year and 2 miles are significantly shorter than the typical 2 years and 5-20 miles. Can franchisees operate similar concepts immediately after exit in nearby locations?
#6
The franchise agreement requires a 10-day cure period for monetary defaults and 30 days for non-monetary defaults. Given the 27.3% termination rate, what percentage of terminations occur due to franchisees failing to cure within these timeframes?
#7
Your renewal conditions require capital expenditures to renovate and modernize the restaurant. What is the estimated capital investment required during renewal, and is this outlined in the Franchise Disclosure Document Item 6?
#8
The dispute resolution clause requires binding arbitration in Orlando, Florida. How many disputes have been arbitrated in the past 3 years, and what were the average costs and outcomes for franchisees?
#9
Territory protection is noted as not exclusive despite being marked as protected. Can the franchisor open additional Chicken Guy! locations within your approved territory?
#10
Personal guarantees are required from all Continuity Group members and their spouses. If a franchisee's spouse is personally liable, what recourse do spouses have if the franchise fails?
#11
With 0% transfer rate and 0% non-renewal rate, combined with 27.3% termination, what exit options exist for franchisees who want to exit before the 10-year term ends?
#12
The renewal fee is $10,000. Can you provide a complete cost estimate for renewal, including required renovations, inspection fees, and any other renewal-related expenses?
#13
Franchisees must purchase all products from franchisor-approved suppliers and accept franchisor-set resale pricing. How are approved suppliers selected, and can franchisees negotiate pricing or source alternatives?
#14
The franchise agreement includes 13 termination causes, which is below the typical 15-23. What are the 5 causes omitted from standard agreements, and does this favor franchisees or the franchisor?
#15
No litigation cases exist in the past 3 years. Are there any ongoing regulatory investigations, complaints to state franchise authorities, or settlements not reflected in filed litigation?
#16
Site approval is listed as a non-curable default. What percentage of franchisee-selected sites are rejected, and what criteria does the franchisor use for site approval?
#17
With only 11 total units, how does the franchisor justify a $50,000 franchise fee and 4.0% ad fund when system marketing leverage is limited?
#18
The franchise agreement requires all goods and food products be purchased from franchisor-approved suppliers. What percentage of your cost of goods sold (COGS) comes from these mandated suppliers versus optional purchases?
#19
Given the accelerating termination trend (1 unit in 2023, 3 units in 2024), what operational or market changes occurred that led to increased terminations, and what corrective measures is the franchisor implementing?
#20