The franchise currently has only 1 unit. Can you provide details on when this unit was opened and the circumstances surrounding the startup of the system?
#1
Given the system's recent launch with only 1 operating unit, what is the franchisor's growth strategy and timeline for expansion?
#2
The ad fund rate of 4.0% is double the typical range for this category. How is this fund allocated and what specific marketing benefits do franchisees receive?
#3
Technology fees of $134 monthly are below typical for the category. What technology services and systems are included in this fee, and are there planned increases?
#4
The territory is non-exclusive with no encroachment protection. Can the franchisor open competing units or allow other franchisees in the same geographic area?
#5
The non-compete clause specifies 5 miles, which is significantly below the typical 10-25 mile range for this category. How does this limited radius protect your investment after exit?
#6
The franchise agreement includes 12 termination causes, below the typical 15-21.75 range. What are the specific grounds for termination, and are any considered subjective?
#7
Personal guarantees are required from all stockholders and spouses without limitation. Can these guarantees be limited to the initial franchise fee and investment, or do they cover all potential liabilities?
#8
Dispute resolution requires binding arbitration in Nevada (the franchisor's location). Can you negotiate for arbitration at a location closer to your franchise operation?
#9
The renewal conditions require 'substantial compliance' with all obligations. How is substantial compliance defined, and what happens if you have minor violations at renewal time?
#10
The franchisor maintains control over pricing policies and requires exclusive suppliers for 5 product/service categories. Can you see a list of approved suppliers and their pricing before signing?
#11
With only 1 existing unit, what financial performance data is available from that unit, and is the franchisor willing to provide referrals or contact information?
#12
The support and training score of 100 is above the typical range. What specific training and ongoing support does the franchisor commit to provide in writing?
#13
Can you clarify whether the $10,000 renewal fee is the only cost to renew, or are there additional requirements such as facility upgrades or equipment replacements?
#14
The franchise agreement requires mandatory remodeling for renewal. What are the estimated costs and timeline for these mandatory remodels?
#15
How does the franchisor define 'approved or designated suppliers' and what recourse do franchisees have if they believe a required supplier is overpriced?
#16
Are there any written guarantees regarding the average gross sales of $666,457, or is this based on a single unit's performance?
#17
What happens to your non-compete obligation if the franchisor terminates your franchise? Does the 2-year/5-mile non-compete still apply?
#18
Can you request copies of the franchise agreement and Item 19 disclosure at least 14 days before signing to review with a franchise attorney?
#19
Given the early-stage nature of this system with only 1 unit, what is the franchisor's financial stability and funding to support franchisee development?
#20