Conquer Ninja

The closure rate of 14.3% is above typical for fitness franchises—what were the circumstances of the 2 units that ceased operations in 2022, and were they franchisor-initiated terminations or voluntary closures?

Why is the initial term 7 years when the category typical is 10 years, and does this shorter term provide less stability for franchisee investment?

The ad fund rate of 3.0% exceeds the category typical of 2.0%—what specific marketing and advertising services does this fund cover, and how are funds tracked and spent?

The transfer fee of $22,500 is significantly higher than the category typical range of $10,000-$17,139—what justifies this premium transfer fee, and are there circumstances where it can be reduced or waived?

The total potential term of 14 years is below the category typical of 15-20 years—how does this shorter maximum term affect long-term business valuation and franchisee exit planning?

The non-compete radius of 30 miles exceeds the category typical of 10-25 miles—how is this 30-mile radius measured (from the center of the territory, from the facility location, or from the franchisee's residence), and are there any exceptions for multi-unit operators?

Given zero litigation cases in 3 years, have there been any disputes, complaints, or conflicts with franchisees that were resolved outside of formal litigation, and if so, what were the common issues?

What are the specific 7 conditions required for franchisees to renew their agreement at the end of the initial 7-year term, and are any of these conditions subjectively determined by the franchisor?

The system has added 3 units in the past year (33.3% growth)—are these new franchisees or existing unit expansions, and what is the franchisor's growth strategy going forward?

With only 12 current units, what economies of scale exist for the ad fund (currently $3.0% of revenue), and has the franchisor considered tiered ad fund rates as the system grows?

Item 19 (financial performance representations) is not included in the FDD—does the franchisor have any data on average unit volumes, profitability, or payback periods that can be shared with prospective franchisees?

The termination clause provides 10 days to cure payment defaults and 30 days for other material breaches—what are examples of material breaches in this franchise system, and has any franchisee ever been terminated under these provisions?

Post-term restrictions include a 2-year non-compete in a 30-mile radius—can a franchisee open a competing fitness concept within 30 miles after the franchise ends, and if they relocate outside the radius during the 2-year period, does the restriction still apply?

Disputes are resolved through mandatory arbitration in Minneapolis, Minnesota—if a franchisee is located on the West Coast, what are the estimated costs and logistics of arbitration in Minneapolis, and can the location be negotiated?

Personal guarantees are required from all shareholders, members, or partners, and spouses must also sign guarantees—does this mean spouses are personally liable for the entire franchise debt even if they are not involved in operations?

The renewal fee is $11,250 (25% of the current franchise fee)—will the renewal fee increase if the initial franchise fee increases before the renewal period, or is the renewal fee locked at the current $45,000 base?

With a relatively short 7-year initial term, how does the franchisor plan to support and invest in franchisee development, particularly in years 5-7 when some franchisees may be planning their exit?

Are there any multi-unit discounts available, or will the franchise fee, transfer fee, and renewal fee remain flat regardless of how many units a franchisee operates?