The monthly technology fee of $1,300 is more than 2.6 times the typical range for business service franchises. What specific services and software are included in this fee, and has it remained constant since the franchise's inception?
#1
Your average gross sales of $7.0 million per unit are substantially higher than the typical range of $302,600-$1,100,000. Can you provide detailed Item 19 financial performance data showing the range of results, number of units reporting, and any adjustments made to calculate these figures?
#2
The system has experienced 33.3% annual unit growth, but currently only has 4 total units. What is your growth trajectory projection for the next 3 years, and what percentage of this growth comes from new franchisee recruitment versus internal expansion?
#3
With 23 non-curable defaults triggering immediate termination, what are the specific operational failures that would result in immediate termination without a cure period, and how frequently have these been enforced?
#4
The contract requires a successor franchise fee equal to 25% of the initial fee ($11,250) upon renewal. Will this fee increase with inflation, and what happens if a franchisee chooses not to renew after the initial 10-year term?
#5
Personal guarantees are required from all 5% owners and their spouses. Can you clarify what specific obligations extend to spouses, and whether they have independent legal rights to contest franchisor enforcement?
#6
The royalty rate of 5.0% is below the typical 6.0-10.0% range. Is this rate locked for the entire 20-year potential term, or does it increase upon renewal?
#7
Territory is designated as non-exclusive with encroachment protection. Under what circumstances could the franchisor place another GoJoe Patrol location within 10 miles of an existing unit, and what compensation or protection exists for affected franchisees?
#8
Zero terminations and transfers have occurred in the system's history. Have any franchisees requested early termination or struggled financially, and if so, how were these situations resolved?
#9
The system has maintained zero turnover over 3 years despite being early-stage. What retention strategies are in place, and are franchisees meeting profitability targets that support this perfect retention rate?
#10
Regarding the indemnification obligations, what specific costs or legal expenses have franchisees been required to cover, and are there limits on the franchisor's indemnity claims?
#11
Can you provide details on the 8 specified renewal conditions, and what percentage of franchisees have historically met all conditions to renew their agreements?
#12
What is the franchisor's definition of 'reasonable restrictions' for approved suppliers, and can franchisees request exceptions or competitive bids from alternative suppliers?
#13
The technology fee of $1,300 monthly ($15,600 annually) represents a substantial fixed cost. If revenue declines, is there any flexibility to reduce or eliminate this fee, or is it non-negotiable?
#14
How many franchisees are currently operating in the system, and what is the geographic distribution of the 4 current units? Are there any planned franchise territories or development agreements?
#15
What training and ongoing support are included given that the Support & Training score of 70 is below the typical range of 74-91? What specific gaps or limitations exist in the franchisor's support structure?
#16
If a franchisee disputes a termination for a non-curable default, what arbitration or dispute resolution process exists, and who bears the legal costs?
#17
Can you clarify the 5-day cure period for payment defaults—does this mean payment must be received within 5 days of delinquency, or does the franchisee have 5 days from notification of default?
#18
The transfer fee is $10,000. Are there any circumstances where the franchisor could refuse to approve a transfer to a qualified buyer, and what is the franchisor's approval timeline?
#19
Given the system's early stage with only 4 units, how is the franchisor financing growth and supporting franchisee success? What is the minimum net worth or capital requirement for prospective franchisees?
#20