The franchisor has initiated 43 litigation cases over 3 years, far exceeding the typical range of 0-3 cases. What are the primary categories of these lawsuits (collections, breach of contract, brand violations, etc.) and what percentage resulted in franchisor victories?
#1
With 4 pending litigation cases, can you provide details on the nature of these pending cases and their expected resolution timeline?
#2
Unit closures increased significantly from 48 in 2020 to 92 in 2021. What operational, market, or policy changes drove this increase in closures?
#3
Terminations increased from 4 in 2020 to 23 in 2021. What were the primary reasons for these 23 terminations, and were they for breaches that franchisees could have remedied with proper guidance?
#4
The system has lost 45 net units (-2.65%) over the past year. What is the franchisor's strategic plan to reverse this decline and attract new franchisees?
#5
The transfer rate of 6.7% is above the typical range. Are franchisees struggling to find qualified buyers, or is this rate primarily driven by franchisor approval denials?
#6
The franchise agreement contains 12 non-curable defaults with a 10-day cure period for fees and 30-day for other breaches. Can you provide the specific list of these 12 non-curable defaults and examples of franchisor enforcement?
#7
You offer zero renewal options after the 20-year initial term. What is the typical outcome for franchisees reaching the end of their term—do you allow renegotiation, or are units typically terminated?
#8
Territory is non-exclusive with no encroachment protection. How do you prevent the franchisor or other franchisees from opening competing Quality Inn locations near an existing franchisee's property?
#9
Personal guarantees are required, making owners personally liable for all obligations. In disputes or terminations, have spouses of franchise owners been pursued for claims?
#10
All disputes must be resolved through mandatory binding arbitration in Maryland under Maryland law. How many franchisees have challenged this mandatory arbitration requirement, and what have been the outcomes?
#11
The System Health score is 48, below the typical range of 50-68. What specific operational or franchise support metrics are driving this below-average score?
#12
Item 19 financial data is available. What percentage of franchisees achieve the median gross sales figures you report, and what is the variance between top and bottom performers?
#13
The Risk Factors score is 0, well below the typical range of 44-75. Does this indicate extremely low risk, or does it reflect missing risk data in the evaluation?
#14
With a transfer fee of $45,000 and termination causing unit loss, what specific support does the franchisor provide to help franchisees avoid termination for breach?
#15
How many of the 44 litigation cases over 3 years were related to the 12 non-curable defaults, and what percentage of these cases involved small independent operators versus larger multi-unit franchisees?
#16
The Territory score of 35 is significantly below the typical range of 50-75. What territorial protections or redress options do franchisees have if the franchisor allows nearby encroachment?
#17
Given the 20-year term with zero renewal options, how do you position the franchise to franchisees—is this a permanent business or a 20-year lease with planned exit?
#18