Chip City

Can you provide details on the 2 unit closures in 2024? Were these voluntary closures by franchisees, and what were the stated reasons?

Your 46.7% unit growth in 1 year significantly exceeds typical Coffee & Bakery franchise growth. What is driving this accelerated expansion, and is this pace sustainable?

Given the total potential contract term of 15 years falls below the typical 20-year standard for this category, what was the rationale for a shorter contract duration?

The $500 monthly technology fee is at the upper range for coffee & bakery franchises. What specific technology systems and support does this fee cover?

Can you clarify the specific performance conditions and facility upgrade requirements for the renewal term? What are the typical costs associated with bringing a location up to current specifications at renewal?

Your agreement requires exclusive purchasing from franchisor or designated suppliers only. How do pricing and margins on these required purchases compare to market alternatives?

The non-compete clause prohibits competing bakery/cake/cupcake/ice cream businesses for 2 years within 25 miles. Has this been enforced against former franchisees, and are there documented cases?

Can you provide more information about the 19 non-curable immediate termination events listed in the termination clause? Which events pose the highest risk?

Your personal guarantee requirement extends to spouses on a joint and several basis. Are there any restrictions or exceptions to this guarantee, such as community property state protections?

The franchisor maintains audit rights at any time during business hours without prior notice. How frequently do audits occur on average, and what triggers an audit?

With zero terminations and zero non-renewals to date, how many franchisees have completed their initial 10-year term and chosen renewal or exit?

The renewal fee is $10,000. What is the typical total cost for facility updates required to meet current specifications at renewal?

Can you provide median and range data for gross sales broken down by unit age or location type (new vs. established)?

Disputes require binding arbitration in New York County with class action waived. How many franchise disputes have been resolved through this process, and what were the outcomes?

Given the rapid growth trajectory, how is franchisee support and training scaling? Are support resources keeping pace with the expanding franchise base?

The agreement requires purchase of all system supplies exclusively from franchisor or designated suppliers. What is the typical supply cost as a percentage of gross sales?

Can you explain the scoring discrepancy where Territory received a perfect 100/100 but Support & Training is 83/100, below typical range? What specific support areas are below category standards?

How are territories defined and protected from encroachment? What recourse do franchisees have if the franchisor opens competing locations or allows nearby franchises?

Of the 44 current units, how many have completed at least one full year of operation, and what is the actual survival rate for units past year 1?

What changes to the franchise agreement or operational requirements have occurred since the earliest franchises were awarded, and would existing franchisees need to comply with new standards at renewal?