The transfer fee of $5,000 is significantly below industry norms for hospitality franchises. What specific restrictions or conditions apply to unit transfers, and does this low fee reflect limited franchisor involvement in the transfer process?
#1
The monthly technology fee of $1,209 is 65% above the typical range for this category. What specific systems and services are included in this fee, and are there any alternatives or opt-out provisions available?
#2
Why did 2024 experience 5 unit closures and 4 terminations when the prior two years reported zero of each? What were the primary causes of these 2024 exits?
#3
The termination rate of 3.3% exceeds typical rates by more than double. What are the most common reasons franchisees are being terminated, and what percentage are related to performance versus compliance issues?
#4
The contract specifies 18 termination causes compared to the typical 14.5-16.0. Can you provide a detailed list of all termination provisions and clarify which are curable versus non-curable?
#5
The 2-year renewal option is considerably shorter than the typical 5.0-10.0 year range. What is the rationale for this shorter renewal period, and how frequently are renewals denied or conditioned upon significant upgrades?
#6
Renewal conditions require compliance with 7 specific provisions. What happens if a franchisee fails to meet one or more renewal conditions, and what is the historical renewal denial rate?
#7
Personal guarantees from franchisee owners and spouses cover all financial obligations. If a franchise fails, what is the extent of franchisor's right to pursue personal assets, and are there any limits to this liability?
#8
Franchisees must purchase CRS, Property Management System, Call Center Reservation Services, Rewards Program, and credit card processing from approved suppliers. What is the markup on these mandated services, and can franchisees negotiate pricing or volume discounts?
#9
The agreement provides only 5-day cure periods for payment defaults. What specifically triggers a payment default, and are there any grace periods or late fees before the 5-day cure period begins?
#10
With zero litigation cases reported, how does this compare to your peer franchisors in the hospitality category, and does this reflect active litigation management or genuine lack of disputes?
#11
The transfer rate of 5.8% exceeds typical ranges. Of the 7 transfers in 2024, how many were approved without objection, and did any involve disputes over the franchisor's approval rights?
#12
The franchise agreement specifies a non-compete of 0 years and 0 miles. Does this mean franchisees can immediately open competing hotels upon exit, and are there any non-solicitation or confidentiality restrictions that extend beyond the franchise term?
#13
Territory is listed as protected but not exclusive. What specific protections exist against franchisor-initiated encroachment, and have there been instances where the franchisor placed a competing unit within a franchisee's area?
#14
The Contract Terms score of 65/100 is below the typical range. What specific contract provisions received lower scores, and are any of these terms negotiable?
#15
Item 19 financial data is included. What percentage of franchisees meet or exceed the median gross sales figures, and what is the cost structure breakdown (labor, utilities, supplies, etc.)?
#16
The immediate termination clause applies to 7 non-curable defaults. Beyond payment and serious breaches, what other actions qualify as non-curable, and how is the franchisor's discretion limited?
#17
Cure periods are only 5-30 days for most breaches. Are there any circumstances where longer cure periods apply, such as capital improvements or major renovations required by the franchisor?
#18
The system grew by 8 units over 3 years while experiencing 17 total exits (12 in 2024 alone). What is your acquisition strategy to sustain growth, and what are your projections for net unit growth in the next 3 years?
#19
Several legal clauses scored 4/5 as franchisor-favorable. Which provisions, if any, are negotiable depending on franchisee qualifications or investment size?
#20