Dunn Brothers Coffee

Can you provide specific details about the 17 unit closures over the past 3 years, including reasons for closure (financial difficulty, owner retirement, relocation, etc.) and any geographic patterns?

The system has declined from 56 units to 48 units over 3 years with a -5.01% compound annual growth rate. What is the franchisor's strategy to reverse this trend and support existing franchisees?

Given the 14.6% closure rate and 10.4% annual turnover rate, what support does the franchisor provide to struggling units before closure occurs?

Average gross sales of $600,081 fall below the typical range for this category. Can you break down sales performance by franchisee experience level, location type, and time in operation?

The franchise agreement specifies 8 termination causes and allows franchisor to set maximum or minimum customer prices. How often has the franchisor exercised price control, and what impact has this had on franchisee profitability?

Personal guarantees are required from all principal owners with spouse consent. Can you clarify what specific circumstances would trigger enforcement of the personal guarantee?

All disputes require binding arbitration within 50 miles of the franchisor's principal place of business in Plano. What is the typical cost and duration of arbitration cases, and are there examples of past disputes?

The renewal conditions require good standing and include a renewal fee of 25% of the initial franchise fee. How many units have renewed or failed to renew in the past 5 years?

What is included in the Item 19 financial performance data, and does it reflect costs for required franchisor-approved suppliers? Are there examples of actual franchisee profitability statements?

The technology fee is $420 annually. What technology systems, tools, or services does this cover, and what are the typical total technology costs a franchisee should budget?

Can you provide a breakdown of the 4 units that experienced non-renewal or ceased operations in 2023, and what factors contributed to their exits?

The non-compete clause restricts 2 years and 5 miles. What activities are restricted, and are there examples of enforcement actions against departing franchisees?

Transfer fees are not specified in the disclosure document. What are the fees and approval requirements for transferring a franchise to a new owner?

How many of the 3 transfers in 2024 were approved, and were there any transfer requests that were denied? On what grounds can the franchisor deny a transfer?

Territory is protected but not exclusive. Can the franchisor place another Dunn Brothers location within a franchisee's territory, and under what circumstances?

The System Health score is 16/100, significantly below the typical range. What specific operational or financial metrics drive this low score, and what is the franchisor doing to improve system health?

What percentage of franchisees are profitable, and what is the average payback period for a new franchisee investment?

Are there any pending litigation cases or regulatory investigations not reflected in the 3-year history that prospective franchisees should be aware of?

The franchise agreement requires purchases from franchisor-approved suppliers. What percentage of operating costs typically goes to franchisor-designated suppliers, and is there a markup built into these arrangements?

Can you provide a list of the franchisor-approved or designated suppliers and their pricing compared to open market alternatives for the same products?