The technology fee of $1,000 monthly is significantly higher than the typical range of $200-500 for fast casual restaurants. What specific technology services and systems are included in this fee, and how is it justified relative to competitors?
#1
Turnover rate spiked to 23.3% in the past year with 7 units closed in 2024 alone. What were the primary reasons for these closures, and what specific support or operational changes has the franchisor implemented to address the closure trend?
#2
The termination rate of 16.7% is substantially above the typical 0.0-1.1% range. Can you provide a detailed breakdown of the 5 terminations in 2024, including the specific violations and whether franchisees had opportunities to cure defaults?
#3
Median gross sales of $709,871 are below the typical range for this category. How many units were included in the Item 19 reporting, and what is the sales performance range (highest to lowest performing unit)?
#4
The transfer fee of $26,250 exceeds the typical range of $8,750-$20,000. Is this fee negotiable, and what does it cover in terms of franchisor approval and transfer support processes?
#5
Your contract provides only a 10-year initial term with no renewal options, compared to the typical 20-26 year total potential term for this category. Why is there no renewal option, and what happens to a successful franchisee at the end of year 10?
#6
The franchisor initiated 1 litigation case as plaintiff. What was the nature of this case, was it resolved, and are there any ongoing disputes that are not yet reflected in pending litigation?
#7
The 25 termination causes identified in the franchise agreement exceed the typical range. Can you clarify which causes are curable vs. non-curable, and provide examples of how the 15-30 day cure period has been applied in practice?
#8
Support & Training score is 88 (below the typical 90.0-100.0 range). What specific training and ongoing support gaps exist, particularly given the high exit rate?
#9
The contract requires binding individual arbitration with class action waivers and jury trial waivers. Are there any documented cases where franchisees have faced arbitration disputes, and what were the outcomes?
#10
Personal guarantees are required from all owners and spouses. Has this been enforced against franchisees post-closure, and what percentage of closed franchisees faced personal liability claims?
#11
Unit count declined from 27 in 2021 to 26 currently despite opening at least 3-4 new units in 2023. How many new units have been opened in 2024, and what is the current pipeline for new franchisees?
#12
Risk Factors score is 45 (below the typical 64.0-80.0 range). What specific operational or financial risks does the franchisor identify, and what mitigation strategies are recommended?
#13
The renewal fee is $17,500. Given that there are no renewal options in the contract, how is this fee disclosed, and under what circumstances would it apply?
#14
Territory is marked as exclusive with protected encroachment. Has the franchisor honored this protection, and have any franchisees filed complaints about encroachment or territorial violations?
#15
Net unit growth has been negative at -13.3% over the past year. What is the franchisor's growth strategy to stabilize or expand the system, and what changes to the franchise model are being considered?
#16
System Health score is only 2 out of 100. What specific system health metrics are failing, and what is the franchisor's action plan to improve franchisee success rates?
#17
Gross sales have declined or remained flat, with median sales of $709,871 below category norms. What pricing strategy, menu optimization, or revenue-enhancement initiatives does the franchisor provide to franchisees?
#18