The total potential contract term of 10,000 years appears to result from 999 renewal options. Can you clarify how renewal options are actually structured and what conditions must be met at each 10-year renewal?
#1
Your non-compete radius of 25 miles exceeds the typical range for fast casual restaurants. What is the business rationale for the wider radius, and how is it enforced in practice?
#2
Top quartile unit sales of $1,158,831 are significantly below the typical range of $1.3M-$2.6M for comparable fast casual concepts. Can you explain what factors contribute to this sales gap and what your highest-performing units achieve?
#3
Your technology fee of $46 monthly is substantially lower than the typical $200-$500 range. What technology services and systems are included at this rate, and are there additional technology costs franchisees should anticipate?
#4
With only 12 units and zero reported closures or terminations, can you provide details on any units that have exited the system in the past 5 years that may not be reflected in current data?
#5
Can you walk through the specific cure periods and conditions for the 10 curable defaults and 17 non-curable defaults outlined in the termination clause?
#6
How have you enforced the non-compete restrictions post-termination, and do you have examples of disputes that have arisen over competitive activity in the restricted territory?
#7
Given the binding arbitration requirement with no class action rights, what was the rationale for including this clause, and have any disputes been arbitrated to date?
#8
You require approved suppliers for 8 different categories. Can you provide the complete list of approved vendors and explain whether franchisees have flexibility to source from alternatives if they meet quality standards?
#9
The franchise agreement mentions franchisor rights to establish minimum or maximum prices. In what scenarios have you exercised this right, and what happens if a franchisee disagrees with the mandated pricing?
#10
Of the 12 current units, how many are company-owned versus franchisee-owned, and do company units perform differently than franchised units?
#11
Can you provide Item 19 data broken down by unit age, location type (urban/suburban), and franchisee background to help assess which franchisees tend to succeed?
#12
What is the average unit volume (AUV) broken down by franchisee tenure, and what is the typical ramp-up period to profitability for new units?
#13
The renewal conditions total 5—below the typical 6-9. What specific conditions must be satisfied for renewal, and are there scenarios where renewal could be denied?
#14
Have any franchise renewal applications been denied in the system's history, and if so, what were the primary reasons?
#15
Given the exclusive territory protection and 25-mile non-compete, how do you define territory boundaries, and what constitutes a conflict in border areas between franchisees?
#16
Can you explain why the system has shown only 1 net unit growth over 3 years (from 11 to 12 units) while zero closures and terminations are reported? Are new units under development, or is growth stalled?
#17
What support and training does Foster's Grille provide post-opening, given that the Support & Training score of 99 is at the top of the category?
#18