The one litigation case reported during the 3-year period did not involve the franchisor as plaintiff or defendant—can you clarify the nature of this case and whether it involved a franchisee, supplier, or other party?
#1
Your median gross sales of $1,835,000 exceed the fast-casual restaurant category range—what are the primary factors driving above-average unit profitability?
#2
The franchise agreement lists 26 termination causes, which is above the typical range of 15-23 for your category. Can you provide a breakdown of these 26 causes and which ones are most commonly cited in practice?
#3
Your termination clause allows termination with only a 5-day cure period for payment defaults and includes 20 non-curable default provisions. How frequently have franchisees triggered non-curable defaults, and what are the top 5 non-curable causes?
#4
The renewal conditions require full remodeling and upgrades with no cost cap specified. What is the typical investment range franchisees should expect for renewal remodeling?
#5
You have exclusive territory protections in place—have there been any instances where the franchisor granted exemptions or opened nearby units despite the exclusivity clause?
#6
The dispute resolution clause requires binding arbitration within 10 miles of your principal business address and waives jury trial rights. How many disputes in the past 3 years have been resolved through arbitration versus settlement?
#7
Your operational control requires franchisees to purchase from franchisor-designated suppliers across 5 categories. What is the estimated percentage of operating costs that must be sourced through designated suppliers?
#8
The personal guarantee requirement in the franchise agreement covers all financial and other obligations. Have you required personal guarantees to be enforced against franchisee owners in any cases during the past 3 years?
#9
The 4 closures in 2022-2023 and zero in 2024 represent a sudden improvement—what operational or support changes were implemented to eliminate closures in 2024?
#10
You offer one 10-year renewal term, which would extend the total potential term to 20 years. What percentage of franchisees renew at the end of their initial 10-year term?
#11
The franchisor controls pricing policies for franchisees—how much discretion do franchisees have to offer promotions, discounts, or adjust prices locally?
#12
Can you provide the breakdown of the single litigation case: was it between the franchisor and a franchisee, or did it involve third parties such as employees, suppliers, or landlords?
#13
Your cross-default provisions apply across multiple franchise locations owned by the same franchisee. How many multi-unit franchisees operate in the current system, and how many have been subject to cross-default disputes?
#14
The technology fee is $250—does this cover all technology services, software access, and digital ordering systems, or are there additional technology costs not included in this fee?
#15
What recourse do franchisees have if encroachment violations occur within their protected territory, and have any franchisees filed complaints about territorial encroachment in the past 3 years?
#16
The transfer fee of $10,000 applies when a franchisee transfers ownership—has this fee or the transfer approval process been cited as a barrier to franchisee exit or resale in any disputes?
#17