Cousins Maine Lobster

The royalty rate of 8% is above the typical 5-6% range for food franchises. How was this rate determined, and is there any flexibility for negotiation or volume-based reductions?

The termination rate of 5.6% significantly exceeds typical norms (0.0-0.6%). What are the primary reasons franchisees are being terminated, and what breach categories trigger immediate termination without cure periods?

Of the 24 termination causes listed in the agreement, which 19 are classified as non-curable defaults with no opportunity to remedy before immediate termination?

Can you provide details on the franchisor-initiated litigation case from the past 3 years, including the nature of the dispute, outcome, and any systemic issues it may have revealed?

The franchise agreement requires purchases of 8 food categories from a franchisor affiliate. What are the specific markup percentages on these products, and how do they compare to market pricing?

What does the 'approval' requirement for non-approved suppliers actually entail in practice? How long does the approval process typically take, and on what grounds can the franchisor deny a supplier?

Given the 35.2% unit growth in the past year, how many of these new units are operating food trucks versus brick-and-mortar locations, and do performance metrics differ by format?

The 2021 cohort shows 5 exits among what appears to be a small initial unit base (roughly 5-10 units). Were these early franchisees part of a pilot program, and if so, how do their outcomes compare to more recent franchisees?

Item 19 shows bottom quartile units generating $900,000 in sales. What is the break-even point, and what percentage of franchisees fall below profitability at this revenue level?

The renewal process requires bringing the food truck up to current standards and meeting 9 conditions. What are the typical costs associated with these upgrades, and how many franchisees have successfully renewed versus exited before renewal?

Post-term non-compete restricts franchisees from competitive business within 15 miles for 2 years. How is 'competitive business' defined, and would operating a different food truck concept or ghost kitchen be prohibited?

The binding arbitration clause in Portland, Maine requires out-of-state travel for many franchisees. Has this been challenged, and are there any documented cases where franchisees could not afford the arbitration process?

Personal guarantees are required from franchisees and spouses. Are there any circumstances under which the franchisor will release these guarantees, such as after a set period of compliance or with the sale of the business?

Transfer fee is $10,000 and renewal fee is $10,000. Are both fees required at renewal if the franchisee transfers the renewed unit, and are there any other fees associated with the renewal process?

The territory is exclusive, but the agreement notes 'False' for encroachment protection. What safeguards prevent the franchisor from opening a competing Cousins Maine Lobster unit or similar concept within the franchisee's territory?

Can you explain the specific reasons behind the 3 closures and 3 terminations in 2024? Were these voluntary exits or franchisor-initiated, and were any related to underperformance?

Median gross sales of $1.24M suggest strong unit economics, but what is the average profit margin after franchisor fees (8% royalty + 2% ad fund + supplier markups) and operating costs?

The franchise requires approval for suppliers, and 8 categories must come from franchisor affiliates. Have there been disputes over this requirement, and is there any contractual right to audit or challenge pricing?

Support & Training scores 100/100, which is above typical. What specific training and ongoing support does the franchisor provide, and how is this differentiated from competitors in the food truck space?