The technology fee of $67 monthly is substantially lower than the typical range for home service franchises. What specific technologies and services are included in this fee, and are there any optional technology upgrades available at additional cost?
#1
Can you provide details on the 1 pending litigation case? What is the nature of the dispute, which party initiated it, and what is the expected timeline for resolution?
#2
Your franchise agreement includes only 12 termination causes, which is below the typical 14-21 for this category. Which specific default provisions are excluded, and how does this impact franchisor protection?
#3
Top quartile units are reporting $2.76 million in gross sales, above the typical range. What specific operational practices, market conditions, or territories drive these high-performing units?
#4
Can you explain the closure patterns over 3 years? In 2022, 11 units closed compared to 4 in 2023. What factors contributed to the higher closure rate in 2022 and the recent 2024 uptick to 9 closures?
#5
Of the 15 total terminations over 3 years, how many were due to non-payment, performance issues, or other causes? Are there specific operational benchmarks franchisees must meet to avoid termination?
#6
The renewal condition requires signing a current franchise agreement. If the agreement terms change substantially between your initial 10-year term and renewal, what provisions protect existing franchisees from unfavorable new terms?
#7
Your non-compete restricts franchisees for 2 years within 25 miles of their territory. How is the 25-mile radius calculated, and does this apply even if the franchisor does not reacquire the territory?
#8
The franchise agreement requires franchisor approval for products, services, inventory, equipment, and advertising materials. Are there approved supplier lists, and do approved suppliers offer competitive pricing compared to market alternatives?
#9
Can you clarify the personal guarantee requirement for all persons holding 5% or more ownership? How strictly is this enforced, and has the franchisor ever required spousal guarantees in practice?
#10
What are the 6 conditions required for renewal beyond the 10-year initial term? Are any conditions subjective, and does the franchisor have discretion to deny renewal even if technical conditions are met?
#11
The system grew 6 net units in the past year, but 24 units closed during that same period. How many new unit openings occurred to generate this net growth, and what is the typical ramp-up time for new units to profitability?
#12
Item 19 reports median gross sales of $629,081 but average of $1,069,145. This large gap suggests significant variance among units. What percentage of franchisees fall below the median, and what factors explain the wide range?
#13
Can you provide a breakdown of the 1 franchisor-initiated case and the 1 case where the franchisor was defendant? What were the outcomes or current status?
#14
Your transfer fee is $7,500 and renewal fee is $5,000. Are there any other fees or costs associated with contract renewal that franchisees should anticipate?
#15
What training and ongoing support is provided to help franchisees reach the top quartile sales figures of $2.76 million? Is there a performance tracking system to identify struggling units?
#16
The non-renewal rate is 1.8% annually. How many franchisees have chosen not to renew versus those denied renewal? What are the primary reasons for non-renewal?
#17
Can you clarify the encroachment protection policy? If a nearby territory becomes available, what prevents the franchisor from allowing another franchisee to operate close to your location?
#18