Class 101

The franchise has been involved in 6 litigation cases over 3 years with the franchisor as defendant in 5 cases. What were the primary subjects of these cases, and what were the outcomes or settlements?

Gross sales performance is significantly below category benchmarks, with median sales of $158,637 compared to the typical range of $220,751-$932,159. What factors does the franchisor attribute to this sales gap, and what support is provided to improve unit economics?

The agreement lists 33 termination causes, which is substantially above the typical range of 15-22 for this category. Can you provide a detailed list of these causes and explain which ones are considered non-curable versus curable with what timeframes?

Five units closed in 2022 compared to 1-2 units annually in surrounding years. What specific circumstances led to the 2022 closures, and what changes has the franchisor implemented to prevent similar patterns?

How does the franchisor's operational control requirement across 11 product/service categories affect franchisee profitability, and are there opportunities to source from alternative suppliers?

The agreement requires maintaining a minimum of 20 active paying customers as of December 31 each year. What happens if a franchisee falls below this threshold, and are there remediation steps before termination?

Late payments accrue 18% annual interest. What is the franchisor's payment default policy, and how frequently do franchisees receive late payment notices?

The franchise fee of $39,900 is below market, but total ongoing fees (8% royalty + 2% ad fund + $149 tech fee) may be higher in practice. Can you provide a detailed 5-year financial projection including all hidden or variable fees?

The territory is protected but not exclusive, and encroachment protection is noted. How many units currently operate in overlapping or adjacent territories, and what is the franchisor's policy on approving units near existing franchisees?

Can you explain the specific nature of the 1 case where the franchisor was plaintiff, and what remedies or outcomes were pursued?

The renewal condition requires payment of 25% of the then-current initial franchise fee plus legal/accounting costs. If the initial franchise fee increases to $55,000 by renewal, what would renewal actually cost?

With a 2-year, 25-mile non-compete post-termination, how is 'college counseling advice' defined in scope, and does it restrict franchisees from working in adjacent education sectors?

Personal guaranty is required from each owner, with spouse guaranties only if they own the franchise. What happens to personal guaranties if ownership structure changes during the term?

The system has grown from 49 to 69 units over 3 years (+41%), yet sales performance declined relative to category benchmarks. What is driving unit growth, and are new units as profitable as established ones?

Item 19 financial performance data is available. How many units reported sales data, and what is the performance spread between top and bottom performers?

Can you provide case studies or references from franchisees who closed or transferred units in 2022-2023, and what were their reasons for exit?

The agreement reserves franchisor right to establish pricing policies for designated suppliers. Have pricing increases significantly outpaced inflation, and what is the typical markup on franchisor-supplied products?

What ongoing training and support is provided beyond the initial period, and how frequently are site visits or compliance audits conducted?

Are there any pending regulatory investigations, complaints to state franchise authorities, or class action lawsuits not reflected in the litigation count?

If the franchise is not renewed, does the franchisor have right of first refusal to acquire the business, and at what valuation methodology?