Given that the median gross sales of $301,527 fall significantly below the Health & Beauty category average, what explains this performance gap, and what support does the franchisor provide to help franchisees reach sales targets?
#1
The franchise enforces a 60% of average gross sales minimum performance standard after year 3. How many franchisees have failed to meet this threshold in the past 3 years, and what are the typical consequences?
#2
Your royalty rate of 5.0% is below the typical 6.0-7.0% range for this category. Is this rate locked in for the entire contract term, or does it increase upon renewal?
#3
The territory score of 35/100 is significantly below the typical 75-85 range, and the franchise provides neither exclusive territory nor encroachment protections. How does the franchisor prevent other franchisees from locating nearby and competing for the same customer base?
#4
Technology fees are only $48/month compared to the typical range of $165-$427.50/month. What technology services and support are included at this rate, and are there additional technology costs not reflected in the stated fee?
#5
Given a 10-year initial term plus 2 renewal options of 5 years each, what specific performance metrics or financial thresholds must be met to qualify for renewal?
#6
The franchise does not offer exclusive territory. How large is your potential customer base within a typical service area, and what is the average franchisee density in established markets?
#7
What was the primary reason for the 4 unit closures in 2021 and the 4 in 2022? Were these primarily due to low sales performance, franchisee decision to exit, or other factors?
#8
The renewal fee is $10,000 and the transfer fee is $12,000. Are there any circumstances under which the franchisor can refuse to renew a franchise or approve a transfer?
#9
In 2022, 11 units were transferred while only 4 closed. What is the franchisor's role in unit transfers, and does the franchisor have any restrictions on who can acquire a transferred unit?
#10
The non-compete clause restricts activity within 2 years and 25 miles. Can you provide examples of enforcement actions the franchisor has taken against former franchisees who violated this clause?
#11
Item 19 financial performance data is provided. How many franchisees reported data in the 2023 Item 19, and is this number sufficient to represent typical performance across the 111-unit system?
#12
Given that the territory is not exclusive, what is the franchisor's policy on approving new franchise locations that may overlap or compete with existing franchisee territories?
#13
Support and training score of 80/100 is below the typical 81.0-96.25 range. What specific training is provided to new franchisees, and what ongoing support is available if a franchisee approaches the 60% sales minimum threshold?
#14
Are there any pending disputes or formal complaints from franchisees that are not reflected in the litigation data, particularly regarding territory disputes or performance standard enforcement?
#15
The system has grown only 3 units net in the past year despite 111 total units. At this growth rate, what is the franchisor's target for system expansion over the next 5 years?
#16