What specific issues led to the 1 case the franchisor initiated, and what was the outcome given it appears to still be pending?
#1
The system has contracted from 289 units (3 years ago) to 244 units currently—can you provide a detailed breakdown of why 41 units closed in 2024 and what percentage were due to economic conditions versus operational issues?
#2
Given that average unit sales of $238,184 are below category norms and top quartile performers are earning only $381,693, what is the typical franchisee profit margin after all expenses, and how does this compare to your initial projections?
#3
The 2023-2024 period shows a significant spike in 'ceased other' units (31-33 annually)—what does this category include, and does it represent abandoned units, forced closures, or something else?
#4
Your System Health score of 22/100 is substantially below the category typical range—what corrective actions are you implementing to address this rating?
#5
Why is the ad fund rate of 2.25% above the category typical range of 1.0-2.0%, and what specific marketing initiatives does this fund support?
#6
The transfer rate of 9.3% exceeds the typical range of 0.0-6.3%—are incoming franchisees expressing concerns about the business model, and what is driving elevated unit transfers?
#7
The non-compete radius of 7 miles is below the category typical range of 10.0-25 miles. How do you prevent encroachment and ensure existing franchisees are protected from new locations?
#8
With renewal conditions totaling 10 items (above the typical 6.0-9.0 range), what conditions must franchisees meet to renew, and how frequently do franchisees fail to meet renewal conditions?
#9
Can you explain why the transfer fee of $5,000 is substantially lower than the category typical range of $7,400-$20,000, and whether this low fee incentivizes transfers?
#10
The Financial Performance score of 49/100 is below the category norm—are there underperforming locations you are considering terminating or closing, and what performance thresholds exist?
#11
Has the franchisor ever been required to provide support or capital to struggling units to prevent closure, and if so, how often does this occur?
#12
What is the current status of the 1 pending litigation case, what are the claims, and could an adverse ruling impact franchisees?
#13
Given the high turnover rate of 16.0%, how do you support new franchisees to help them reach profitability in the first 3-5 years?
#14
The total potential contract term of 40 years exceeds typical ranges—are renewal terms automatic, or can the franchisor decline renewal for underperforming locations?
#15
Can you provide names and contact information for at least 10 franchisees who have closed in the past 2 years so I can understand their reasons for exit?
#16
With 7-mile non-compete radius, what prevents a former franchisee from opening a competing code education business just outside their 7-mile zone?
#17
Your Investment Cost score of 71/100 falls below the typical range for this category—what are the typical startup costs beyond the $40,000 franchise fee, and what is your estimate for break-even timeline?
#18