Dairy Queen

Can you provide details on the nature and outcomes of the 3 pending litigation cases and explain why the franchisor initiated 3 cases as plaintiff in the past 3 years?

What specific circumstances led to the elevated transfer rate of 9.5% (14 transfers in 3 years)? Were these transfers due to franchisee-initiated sales, franchisor-directed changes, or other factors?

The ad fund rate of 4.5% is higher than the typical 2.0-4.0% range for QSR franchises. How is this fund allocated and what specific marketing programs or services does it fund?

Given the 20-year initial term (significantly longer than the typical 10-15 years), what is the rationale for this extended commitment period, and what protections exist for franchisees during this lengthy term?

The non-compete clause specifies 1 year and 0 miles, which is shorter than the typical 2 years and 5-10 miles. Why was the geographic radius set to 0 miles, and does this mean non-compete restrictions are location-specific rather than radius-based?

Can you explain the distinction between the 3 litigation cases where the franchisor was plaintiff versus the 3 cases where the franchisor was defendant? What were the primary issues in dispute?

With 3 cases currently pending, what is the expected timeline for resolution, and how might outcomes affect current or prospective franchisees?

The royalty rate of 4.5% is below the typical 5.0-6.0% range. Is this a competitive advantage, and are there any conditions under which the royalty rate could increase?

Item 19 shows average gross sales of $1,615,815. What is the current number of units reporting this financial data, and how representative is this figure across different unit sizes, locations, and operational models?

What are the 8 specified renewal conditions mentioned in the renewal clause, and how frequently do franchisees fail to meet these conditions?

The binding arbitration clause requires all disputes to be resolved in Missoula, Montana. What is the average cost and timeline for arbitration under this provision, and has this been a point of contention in any of the 6 litigation cases?

Can you detail the 9 curable and 10 non-curable defaults in the termination clause? Which defaults have been most frequently cited in disputes or termination actions?

What products or services fall under the 6 categories of single-approved suppliers, and what is the typical price impact of using only approved vendors versus sourcing independently?

The renewal fee is $2,500 and $4,000 is mentioned separately—can you clarify the difference and what costs are associated with each renewal?

Given the non-exclusive territory with no encroachment protection, how does the franchisor manage unit density, and are there examples of encroachment situations affecting existing franchisees?

What modernization, replacement, and upgrade provisions are required at renewal, and what is the typical capital investment required to meet these conditions?

With zero terminations and zero non-renewals historically, what circumstances would trigger franchisor termination, and how many franchisees have chosen not to renew?

The personal undertaking and guarantee requirement means all owners are personally liable. Are there limitations on personal liability, and has personal liability exposure been an issue in the 3 defendant cases?