DECORATING DEN INTERIORS

The franchise fee of 39,900 is below typical for this category. What is included in this fee, and are there any additional upfront costs not listed?

Royalty rate is 9.0% (above typical 6.0–7.0%). How is this calculated—on gross or net revenue? Are there any tiered structures or waivers for underperforming locations?

Ad fund rate is 4.0% (above typical 1.0–2.0%). How are these funds allocated, and can franchisees request an audit or accounting of ad spend?

The system has lost 15 units over 3 years with 13.5% 1-year turnover and 38.5% 3-year turnover. What do you attribute these closures to, and are there regional patterns?

30 units closed in 2024 alone. Were these primarily voluntary closures or franchisor-initiated terminations? What support was offered to struggling franchisees?

What are the average unit economics (AUE) or median gross revenue for operating franchisees? Item 19 is not disclosed—why not?

Territory is non-exclusive with no encroachment protection. How many franchisees operate in the same territory, and is there a policy limiting density?

Initial term is only 5 years (vs. typical 10 years) with total potential term of 5 years (vs. typical 15–20 years). What is the renewal process, and are renewal terms guaranteed or renegotiated?

Non-compete is 2 years / 50 miles (50 miles is above typical). Can this be modified during negotiations? Are there exceptions for different business models?

Only one lawsuit against the franchisor in 3 years—was this resolved, and what was its nature? Are there any pending disputes not yet formalized?

Transfer fee is 10,000. Does this apply to all transfers (to family, third parties, or franchisor buyback)? Can this be negotiated?

What specific support and training programs drive your high training score of 91? How much is in-person vs. online, and is ongoing training included after the initial launch?

With 5-year decreasing unit count, how many new franchisees do you recruit annually, and what percentage of recruits survive their first 3 years?

The contract lists only 9 termination causes (below typical 14–21). What are these specific causes, and are there any ambiguous terms that could lead to disputes?

Personal guarantees are required from all stockholders and LLC members. Can this requirement be waived or limited for multi-unit operators or passive investors?

Dispute resolution requires mediation in Maryland then arbitration in Talbot County. Are there any cost estimates for this process, and can disputes be resolved locally?

Technology fee is 100/month (below typical 156–599/month). What software and tools does this cover? Are there additional digital or e-commerce fees?

With the system contracting, what is the franchisor's growth strategy? Are you expanding into new markets or consolidating existing locations?