Cupbop

The ad fund rate of 4.5% is significantly higher than the typical range of 1.5-3.0% for fast casual restaurants. What specific marketing initiatives and channels does this fund support, and how is spending accountability ensured?

Financial performance data shows average and median sales of approximately $728,821 and $710,250, well below the category average of $932,006-$1,901,495. What factors contribute to this sales variance, and what support does the franchisor provide to underperforming locations?

The initial franchise term is only 10 years with no renewal options documented, compared to the typical 20-26 year total potential term for fast casual franchises. Can you clarify the renewal options available beyond the initial 10-year term, and what conditions apply?

Can you provide details on the 3 unit closures in 2024? What were the primary reasons for closure, and were they in specific geographic markets or due to franchisee-specific challenges?

The contract terms score of 55 falls below the typical range of 60-65. Which specific contract provisions are most franchisor-favorable, and what negotiation flexibility exists on key terms?

Personal guarantees are required from all owners with 5% or greater beneficial ownership. Under what circumstances would the franchisor require spouse guarantees, and what is the scope of personal liability exposure?

The franchise agreement requires minimum sales performance of at least 50% of the trailing twelve-month average. How is this metric calculated, how frequently is it monitored, and what remedies apply if a location falls below this threshold?

Late payment fees of 10% plus 18% annual interest (or highest applicable rate) are substantial. Are there any grace periods or circumstances where these penalties are waived, and how often do franchisees incur late fees?

Termination requires notice with cure periods ranging from 3 days to 90 days depending on violation type. Can you provide specific examples of non-curable defaults that could result in immediate termination without opportunity to cure?

The franchise agreement mandates binding arbitration with a class action waiver and jury trial waiver. What has been the franchisor's historical approach to dispute resolution, and are there any pending or recently settled disputes not captured in the 3-year litigation history?

Territory is protected but not exclusive, with encroachment protections available. How does the franchisor define and enforce encroachment protections? Are there documented cases where the franchisor opened competing units within protected territories?

The renewal fee is $10,000, which is the same as the transfer fee. Beyond the monetary cost, what specific operational or compliance requirements must be met to qualify for renewal after the initial 10-year term?

The 2-year, 20-mile non-compete applies post-termination. If a franchisee's location underperforms and closes voluntarily, does this non-compete still apply, and how is it enforced?

No franchisee transfers have occurred in the system's recent history (0.0% transfer rate). Why is transfer activity so limited? Are there contractual restrictions, franchisor approval barriers, or market conditions preventing unit transfers?

Units increased from 45 to 59 over 3 years (31% growth), but growth has been organic rather than through franchisee transfers. What is the franchisor's unit development strategy, and are aggressive growth targets communicated to franchisees?

Given the below-average sales performance compared to peer franchises, what training and ongoing support does the franchisor provide to improve unit economics? What is the average length of time before a new franchisee reaches profitability?

The investment cost score of 80 is above the typical range, indicating favorable initial investment terms. What is the total initial investment required, and are there any hidden or variable costs not disclosed in the Item 7 fee schedule?

Zero terminations have been recorded despite 5.1% annual exit rate. Does the franchisor prefer to work with struggling franchisees rather than terminate, and what remediation support is offered before closure or termination?