Can you provide detailed information on the 18 cases where Cold Stone was the defendant, including the nature of claims, outcomes, and settlements? What do these cases reveal about common franchisee grievances?
#1
What specific issues prompted the 3 cases where Cold Stone was the plaintiff against franchisees, and how were these resolved?
#2
Given the 5 litigation cases in the past 3 years, what has changed in franchise operations or support to address the underlying issues raised in these lawsuits?
#3
The non-compete clause restricts franchisees from any involvement in competing businesses for 2 years within 10 miles. How is 'any involvement' defined and enforced, and have there been disputes over its scope?
#4
Why does the agreement specify 25 different grounds for termination compared to the typical 15-20 for similar franchises? Can you explain the categories and provide examples of non-curable defaults?
#5
The franchise fee of $27,000 is notably lower than the typical $30,000-$40,000 range. Does this reflect a recent price adjustment, and are there any plans to increase franchise fees for new franchisees?
#6
The territory score of 35 is well below the typical range. Given the lack of exclusive territory and no encroachment protection, what prevents Cold Stone from opening competing locations near existing franchisees?
#7
Transfer rate is 6.2%, at the upper edge of the typical range. What is driving the volume of unit transfers, and what is Cold Stone's approval process for new owners?
#8
Among the 12 units closed in 2024 and the 62 transferred, how many of these were due to franchisee performance issues versus market conditions or voluntary business decisions?
#9
The termination clause requires less than 24 hours to cure social media policy violations. Can you clarify what specific violations trigger this requirement and provide examples of violations that have resulted in termination?
#10
The renewal conditions require 120 days' notice and meeting 9 compliance conditions. What percentage of franchisees fail to renew or are denied renewal, and what are the most common reasons?
#11
Personal guarantees from all shareholders, members, owners, and their spouses are required. How is this enforced if a franchisee encounters financial difficulties, and has Cold Stone pursued personal guarantees in litigation cases?
#12
All disputes must go to binding arbitration in the county and state where the franchised business is located. Has Cold Stone used this clause to prevent class action litigation, and what are typical costs for arbitration?
#13
The total potential term is 15 years (10 years initial + 1 renewal of 5 years). Are there any circumstances where franchisees can negotiate additional renewal options beyond the single 5-year renewal?
#14
What is included in the annual $75 technology fee, and does this cover all required point-of-sale systems, online ordering platforms, and delivery integrations?
#15
The agreement distinguishes between 4 curable defaults and 20 non-curable defaults. Can you provide the complete list of non-curable defaults and clarify the procedure for franchisees to remediate curable defaults?
#16
Given the 6.2% exit rate, what support or intervention does Cold Stone provide to struggling franchisees before termination or closure is considered?
#17
How has the 2-year non-compete restriction affected former franchisees' ability to work in the ice cream or frozen dessert industry in other geographic markets?
#18
The renewal fee is $13,500. Are there additional costs (legal, redesign, equipment upgrades, or retraining) required to renew a franchise at the end of the initial 10-year term?
#19
What triggered the litigation activity in the past 3 years, and are there pending regulatory investigations or changes to franchise disclosure practices as a result?
#20