The technology fee of $1,200 monthly is 37% higher than the typical range for this franchise category. What specific services and software are included in this fee, and is it subject to annual increases?
#1
Your franchise agreement lists 29 termination causes, which is 33% higher than typical for this category. Can you provide a detailed breakdown of these causes and explain which ones are most commonly cited in termination notices?
#2
Renewal conditions are listed as only 3, significantly below the typical 6-8 for this category. What specific conditions must franchisees meet to qualify for renewal, and are there any facility or performance standards required?
#3
All units reporting financial data show sales significantly above industry norms for this category. What percentage of your current 28 units reported financial data for Item 19, and how do locations vary geographically in revenue performance?
#4
Your system has experienced zero exits over 3 years while growing 86% in unit count. How many franchisees have been operating for more than 5 years, and what do exit data show for any franchisees who left prior to 2022?
#5
The franchisor maintains control over 5 categories of supplier restrictions with pricing control. Which suppliers are designated or approved, and can franchisees negotiate pricing or use alternative suppliers with franchisor approval?
#6
Binding arbitration is required in New York with class action waiver provisions. Has any franchisee requested to arbitrate disputes outside New York, and how many arbitration cases has the franchisor been involved in over the past 5 years?
#7
Personal guarantees from all owners and potentially their spouses are required. Does the franchisor release the spouse from the guarantee if they are not involved in operations, and are there any limits on what debts the personal guarantee covers?
#8
The transfer fee is $12,500 and renewal fee is $25,000. Are these fees applied in addition to any other fees, and what is the refund or credit policy if a franchisee decides not to renew?
#9
The cure period for payment defaults is 5 business days. How is this calculated, and what constitutes a payment default—does this include all franchise fees or only royalties?
#10
Franchisees have up to 180 days to relocate if they lose occupancy rights. Does this period apply to all location loss scenarios, and does the franchisor provide assistance in identifying new locations?
#11
Bottom quartile sales units still generate over $1.69 million annually. What is the typical operating expense ratio for underperforming locations, and at what revenue threshold would the franchisor typically intervene?
#12
Your support and training score of 100 exceeds typical ranges. What does the initial training program include, how long is it, and what ongoing training support is provided annually?
#13
The territory is exclusive with 10-mile non-compete. How is the territory size determined, and can the franchisor adjust territory boundaries if demographic or competitive conditions change?
#14
With a 10-year initial term and 20-year total potential term, what triggers would allow the franchisor to decline renewal at the end of the initial 10 years?
#15
Zero litigation cases appear on record over 3 years. Has the franchisor settled any disputes confidentially, and what is the typical franchisee complaint or concern that doesn't result in formal litigation?
#16
The franchise agreement requires purchasing operating assets only from approved or designated suppliers. Are these suppliers also available to the general public at the same pricing, or does the franchisor negotiate exclusive pricing?
#17
Your Item 19 financial data shows median sales of $2.21 million. What is the cost of goods sold and typical operating profit margin for an average location using this revenue data?
#18