The franchise fee of $55,000 exceeds typical range for this category—what specific services, training, or support justify this premium pricing compared to competitor offerings?
#1
Your royalty rate of 5.0% is notably lower than the category typical range of 6.0-7.0%—does this rate increase after an initial period, or are there volume-based escalations?
#2
The transfer fee of $27,500 is substantially higher than the typical range of $7,500-$20,000—what does this fee cover, and is it refundable under any circumstances?
#3
Your system grew 50% in the past year (9 new units)—what is your target unit count for the next 3 years, and what market conditions or territories are driving this expansion?
#4
Average gross sales of $1,200,000 significantly exceed category norms—can you provide the Item 19 breakdown showing median sales, sample size, and what percentage of franchisees achieve this level?
#5
The agreement lists 22 termination causes compared to the typical range of 15-21—what are the additional 1-6 causes beyond standard defaults, and how often have these been invoked?
#6
Renewal requires satisfying 11 conditions (above the typical range of 6-9)—can you provide the complete list of these conditions and clarify which are performance-based versus compliance-based?
#7
With zero litigation cases over 3 years, how many formal disputes or complaints have been filed that did not result in litigation, and how were they resolved?
#8
The Support & Training score of 75 falls below the category typical range of 81.0-96.25—what specific training is provided at franchise launch versus ongoing support, and is additional training available at extra cost?
#9
With exclusive territories and encroachment protection in place, what safeguards prevent the franchisor from establishing company-owned locations or alternative brand concepts within franchisee territories?
#10
The non-compete clause restricts operation within 5 miles for 2 years post-exit—how is the 5-mile radius measured (from the franchised location, franchisor headquarters, or other reference point), and does this apply to all types of beauty/medical spa services?
#11
The renewal fee equals 10% of the then-current initial franchise fee—if you increase the initial franchise fee to $75,000 before my renewal in Year 10, my renewal fee becomes $7,500. Can you walk through your historical fee increase pattern?
#12
Personal guarantees are required from all owners with 10%+ ownership—if ownership changes or an owner buys out their stake, does the remaining owner need to re-sign the guarantee?
#13
The franchisor controls minimum and maximum pricing for all products and services—how frequently are these price controls adjusted, and do they account for regional cost-of-living variations?
#14
All products, supplies, equipment, and services must be purchased from franchisor-approved suppliers—what is the approval process, can franchisees request approval of alternative suppliers, and are prices competitively benchmarked?
#15
With zero terminations and transfers to date, have any franchisees requested to exit or been placed on remedial plans, and if so, how many and what triggered the issues?
#16
The territory score of 100 exceeds typical range at 75.0-85.0—what specific territory protections or characteristics lead to this exceptional score?
#17
Given the $27,500 transfer fee plus renewal fees and operational requirements, what is the typical cost for a franchisee to sell their location to a qualified buyer, and what percentage of transfers are approved versus denied?
#18
Can you provide references from 5-10 franchisees currently operating dermani MEDSPA® locations, including mix of early-stage (1-2 years) and mature locations (5+ years)?
#19
What is your stated position on social media, online reviews, and direct-to-consumer marketing—are there franchisor-imposed restrictions or guidelines that limit franchisee marketing autonomy?
#20