Can you provide details on the 3 closures recorded between 2022-2024? What were the circumstances, and did any involve financial distress or operational failures?
#1
The technology fee of $1,000 monthly is 2-10 times higher than typical retail franchises. What specific services and technology platforms does this fee cover, and are there options to reduce or eliminate it?
#2
The franchise fee of $45,000 is above typical range. Does this include initial inventory, equipment, training, and working capital, or are there significant additional startup costs?
#3
Your ad fund rate of 0.25% is substantially lower than the typical 1.0-2.0% for retail franchises. How is the advertising budget allocated, and can franchisees opt into additional marketing support at additional cost?
#4
The royalty rate of 4.0% is below typical retail ranges. Are there volume discounts, performance bonuses, or tiered royalty structures based on unit sales performance?
#5
The non-compete clause extends 25 miles, above the typical 10-20 mile range. What is the rationale for the wider restriction, and has this caused issues for franchisees seeking to relocate or transition out?
#6
Why does the franchise agreement contain 25 termination causes compared to the typical 14-19 causes? Can you provide the complete list and clarify which are most commonly enforced?
#7
The initial term is 20 years with one 5-year renewal option (25 years total), significantly longer than typical. What is the rationale for this extended commitment period?
#8
Gross sales figures ($1.5M median) are notably higher than typical for retail franchises. What is the average unit volume broken down by location type (urban vs. suburban), store size, and tenure?
#9
Can you explain the cure period disparity where franchisees receive 15 days but the franchisor receives 90 days for material obligations? How is this asymmetry justified?
#10
The agreement requires personal guarantees from all owners holding 20% or more equity and their spouses. Are there any cases where franchisees or their spouses were held personally liable for franchisor disputes or indemnification claims?
#11
Operationally, franchisees must source virtually all goods and services from the franchisor or approved suppliers. What percentage of unit costs typically come from franchisor/approved supplier relationships versus open market purchases?
#12
There is a $10,000 transfer fee. Under what conditions can units be transferred, and do you provide support or assistance in finding qualified buyers?
#13
The agreement mentions 8 renewal conditions. Can you provide the complete list and clarify which conditions most commonly result in renewal being denied?
#14
Are there any encroachment issues reported, despite the protected exclusive territory? Have any franchisees raised concerns about competing Fleet Feet locations opening nearby?
#15
With zero terminations recorded, what triggers the 25 termination causes in the agreement? Can you provide examples of scenarios that have led to enforcement?
#16
The franchise agreement provides for post-term restrictions including non-compete. Have any former franchisees challenged these restrictions, and have any disputes resulted in legal action?
#17
What is the average unit economics breakdown (revenue, COGS, labor, overhead, net profit margin) for a typical profitable unit at different sales tiers?
#18
Can you provide information on franchisee support for unit sales, financing options, and whether the franchisor provides assistance with buyer qualification during transfers?
#19
Are there any planned fee increases, system changes, or modifications to the renewal or termination provisions in the next 1-2 years that should be factored into long-term planning?
#20