Given the technology fee of $50 monthly is significantly below industry typical range of $75-$300, what specific technology services and platforms does this fee cover, and are there any additional technology costs not included in this base fee?
#1
The contract terms score of 53/100 falls below the typical 60-65 range for F&B franchises. Can you clarify the specific contract provisions that diverge from industry standards and explain the rationale behind each?
#2
With 31 termination causes in the agreement versus the typical 15-20 for comparable franchises, what are the primary grounds for termination, and how frequently have each been invoked historically?
#3
The total potential term of 8 years is significantly shorter than the typical 15-20 years for F&B franchises. What was the rationale for this shorter contract length, and how does this affect long-term unit profitability and exit strategy?
#4
Renewal conditions are listed as 6 versus the typical 7-9 range. Which conditions from a standard renewal agreement have been eliminated or combined, and what does this mean for renewal eligibility?
#5
The renewal option offers only 3 years versus the typical 5-10 year renewals in this category. After your 5-year initial term, what happens to franchisees who wish to continue beyond the 3-year renewal period?
#6
The agreement requires a 2-year non-compete with no mileage radius specified. Does this mean the non-compete is geographically unlimited, and how would this be enforced against former franchisees opening competing businesses?
#7
The post-term restrictions clause prohibits competition in 'bubble tea, brewed tea, coffee, juices, smoothies and related products' for 2 years. How broadly does 'related products' extend, and has the franchisor ever litigated violations of this clause?
#8
All disputes must be resolved through binding arbitration within 50 miles of San Francisco, California. How have franchisees outside California responded to this geographic restriction, and are there any documented disputes that have gone to arbitration?
#9
The agreement requires personal guarantees from all owners and spouses with unlimited scope. Have there been any instances where the franchisor has pursued guarantors personally for franchise obligations?
#10
As the exclusive supplier for essential ingredients, can you provide a detailed breakdown of ingredient costs as a percentage of COGS, and how frequently have ingredient pricing changed in the past 3 years?
#11
The franchisor maintains rights to set maximum or minimum pricing for products and services. Can you provide examples of how pricing parameters have been adjusted, and what flexibility do franchisees have in setting their own prices?
#12
Operating hours and days require franchisor approval. What are the standard operating hour requirements, and what flexibility exists for franchisees to adapt hours based on local market conditions?
#13
Territory is protected but not exclusive—what does 'protected' territory mean operationally, and under what circumstances could the franchisor open or authorize another CoCo location nearby?
#14
In 2023, 2 units transferred and 1 experienced 'other cessation' while 1 closed. Can you provide details on the reasons for these exits and whether the closed unit was a company-owned or franchised location?
#15
With zero franchisor-initiated terminations to date, how many units have departed through voluntary non-renewal, and what feedback did those franchisees provide about their reasons for exiting?
#16
No Item 19 financial performance data is provided. Would you be willing to share historical financial performance data (average unit volumes, profitability ranges, or case studies) for existing franchisees?
#17
Support & Training scores 100/100, above the typical range. What specific training and ongoing support programs distinguish CoCo's offering, and how are these delivered (in-person, online, hybrid)?
#18
Are transfer and renewal fees waived, or are they simply not disclosed in the public disclosure document? If charged, what are the actual costs?
#19
How many of the current 35 units are company-owned versus franchised, and has the company-owned versus franchised ratio changed over the 3-year period?
#20