What is the nature and status of the current pending litigation case, and does it involve franchise-related disputes or other matters?
#1
Why is the monthly technology fee of 1,000 significantly higher than the typical range of 156.50–877.75 for sports and recreation franchises, and what specific services and platforms does this fee cover?
#2
The franchise fee of 35,000 is below market for this category—does this reflect a promotional period, or is there a different pricing structure for different unit types or locations?
#3
Given the 200% unit growth rate in the past year (from 1 to 3 units), what is the franchisor's growth projection for the next 3–5 years, and what support systems are in place to maintain quality with rapid expansion?
#4
Can you provide detailed financial performance data (Item 19 or equivalent) showing average unit volumes, profit margins, and payback periods for existing franchisees?
#5
How many of the current 3 units are company-owned versus franchisee-owned, and what is the performance comparison between company-owned and franchised locations?
#6
The termination clause specifies different cure periods for payment defaults (10 days) versus operational defaults (30 days)—can you provide a complete list of all 18 non-curable defaults that would result in immediate termination?
#7
What specific events triggered the pending litigation case, and has it resulted in any financial settlements, judgments, or operational changes to the franchise system?
#8
The non-compete restriction includes both 2 years and 25 miles—does this apply if a franchisee is not renewed, and are there any geographic exceptions or modifications available through negotiation?
#9
Given that the system has only 3 units and the pending litigation, how stable is the franchisor's financial position, and are there any concerns about continued operations or support?
#10
What is the renewal fee of 5,000, and does it include renegotiation of terms, or are all terms locked in for the original 10-year period and renewals?
#11
How does the franchisor define 'encroachment,' and are there specific distance or competitive benchmarks beyond the non-compete clause that protect franchisee territories?
#12
Since the system had zero units 3 years ago, can you provide the franchisor's business history, investor backing, and timeline for achieving profitability at the corporate level?
#13
The personal guarantee requirement binds both owners and spouses individually, jointly, and severally—are there any circumstances under which this can be modified or limited?
#14
What happens to the franchise and territory if the franchisor is acquired, merges, or files for bankruptcy, and are there provisions to protect franchisee investments?
#15
Can you provide references from all 3 current franchisees, and specifically address why you are recommending this franchise given the very small unit base and pending litigation?
#16
What is the average revenue and profitability for the current 3 units, and how do these compare to the franchisor's initial projections when those units opened?
#17
Are there any territorial disputes or complaints from the 3 current franchisees regarding encroachment or competitive conflicts within protected territories?
#18