The ad fund rate of $300 (or 300 basis points) is significantly above the typical range of 1.0-2.0% for sports and recreation franchises. How is this ad fund amount calculated and what specific marketing initiatives does it support?
#1
With only 2 current franchised units, how does the franchisor plan to scale the system, and what are the financial projections for unit growth over the next 3-5 years?
#2
The franchise has experienced 100% unit growth in the past year. Is this growth rate expected to continue, and what support systems are in place to accommodate rapid expansion?
#3
The franchise agreement requires minimum royalties of $12,500 per measurement period. How frequently are these measurement periods, and what happens if a unit fails to meet this threshold?
#4
Interest on late payments is set at 18% per annum. How often does the franchisor experience late payments, and what is the typical payment compliance rate among current franchisees?
#5
The agreement allows termination for payment defaults with only a 10-day cure period. Can you provide examples of how this has been applied, if at all, among current franchisees?
#6
All disputes must be resolved through binding arbitration with a class action waiver. Has the franchisor or any franchisees ever pursued arbitration, and if so, what were the outcomes?
#7
Personal guarantees are required from all direct and indirect owners and their spouses. How is spousal liability enforced in practice, and are there any limitations or exclusions to this requirement?
#8
The franchise requires exclusive use of approved suppliers and vendors. Provide a complete list of approved suppliers for all major product categories and the process for requesting exceptions or alternatives.
#9
The territory is protected but not exclusive, and the franchisor has encroachment protection rights. Has the franchisor ever added units or authorized competitors within existing franchisee territories?
#10
With zero litigation history over 3 years, are there any disputes currently in negotiation or settlement discussions that are not reflected in formal legal filings?
#11
What is the current ownership structure of the franchisor, and are there any pending changes in ownership, financing, or corporate structure?
#12
Item 19 shows average gross sales of $339,761, but no units reporting figure is provided. How many of the 2 current units provided financial data for this calculation, and what was the range of performance?
#13
The transfer fee is $10,000. Beyond this fee, what are all other costs associated with transferring a franchise to a new owner?
#14
Non-compete restrictions are 2 years and 10 miles. Are there any other restrictions on post-exit activity, and how aggressively does the franchisor enforce these restrictions?
#15
The franchisor can set maximum or minimum pricing unless prohibited by law. What pricing guidance or controls currently exist for franchisees, and how flexible is pricing decisions in local markets?
#16
Given the early-stage nature of the system (only 2 units), what franchisor-provided support infrastructure exists for training, operations, marketing, and technology?
#17
Are all 2 current units company-owned or franchised, and if any are company-owned, when does the franchisor plan to franchise them?
#18
The franchise fee is $45,000. What is the typical total startup investment range for franchisees including real estate, equipment, inventory, working capital, and other costs?
#19
What financial performance benchmarks or targets are expected of franchisees during the initial ramp-up period, and how does the franchisor support underperforming units?
#20