Given that the system has remained at exactly 10 units for 3 years with zero growth, what is the franchisor's expansion strategy and timeline for unit growth?
#1
What explains the Investment Costs score of 48, which is substantially below the typical range of 73.0-77.0 for casual dining franchises—does this reflect higher initial capital requirements or other cost factors?
#2
Why does the Support & Training score of 77 fall below the typical range of 90.0-100.0 for this category? What specific training or support services are not included or are limited?
#3
The Risk Factors score of 80 exceeds the typical range of 61.0-78.5. What specific risk factors are elevated in this franchise agreement?
#4
With only 10 franchised units in the system, what is the financial viability of the franchisor and their ability to provide ongoing support and development?
#5
Can you provide specific financial performance data (Item 19) or case studies from existing franchisees to validate the franchise model's profitability?
#6
The contract requires a minimum monthly royalty of $2,300 regardless of sales. For a startup location, how long does the franchisor estimate before reaching this sales threshold?
#7
What is the franchisor's policy on enforcing the non-compete clause (2 years, 10 miles)? Have there been any enforcement actions?
#8
Why is territory marked as protected but not exclusive? What encroachment protections exist, and under what circumstances could the franchisor authorize a competing location nearby?
#9
The franchise agreement includes mandatory binding arbitration with class action and jury trial waivers. How has this dispute resolution mechanism been applied in practice, and what was the outcome?
#10
Personal guarantees are required from all 20%+ owners and their spouses. Can you clarify the scope of personal liability in the event of franchise failure or contract breach?
#11
All suppliers must be franchisor-approved or designated. How does the franchisor determine approved suppliers, and what flexibility exists for local sourcing or cost optimization?
#12
The franchisor may set minimum and maximum retail prices. How frequently are prices adjusted, and how much pricing control do franchisees retain?
#13
Late payments incur 18% simple interest annually. Have any franchisees been assessed late fees, and what is the typical reason for payment delays?
#14
Renewal requires 7 specified conditions to be met. Can you provide the complete list of renewal conditions and examples of franchisees who have failed to meet them?
#15
The renewal fee is $4,500 (10% of the then-current franchise fee). How often does the franchisor update the base franchise fee, and how would this affect future renewal costs?
#16
With zero litigation cases reported, does this reflect a strong franchise relationship or limited franchisee awareness of legal recourse options?
#17
Are there any disputes currently being resolved through mediation or arbitration that would not appear in formal litigation records?
#18
What is the average unit volume (AUV) for the 10 existing franchisees, and are all units profitable?
#19
How long has this franchise system been operating, and when were the current 10 units established?
#20