Gong cha USA Franchising, LLC

What were the specific circumstances and reasons for the 2 unit closures in 2023? Were these voluntary exits or franchisor-initiated terminations?

What is the nature of the 2 pending litigation cases, and what do they involve? Are they related to franchise agreement disputes, operational issues, or other matters?

Why did the franchisor initiate litigation against a franchisee, and what was the outcome or current status of that case?

Given the 200% unit growth in the past year, what is the franchisor's growth strategy and timeline for the next 3-5 years?

The average and median gross sales are notably below category peers. Can you provide Item 19 financial performance data broken down by unit age to understand if newer units are underperforming or if the system has inherent lower sales levels?

Why is the ad fund rate 1.0%, significantly lower than the typical range of 1.5-3.0%? Does this lower rate correspond to reduced marketing support compared to competitors?

What specific conditions must be met to qualify for the single 10-year renewal, and how many franchisees have successfully renewed their agreements to date?

With 10 renewal conditions (above the typical range of 7-9), what are the most restrictive or costly conditions that franchisees should be aware of?

Can you provide details on the 2 cases where the franchisor was the defendant? What were the allegations or claims made against the franchisor?

How is the exclusive territory defined and protected? Are there specific restrictions on multi-unit development or satellite locations within the territory?

The personal guarantee and spouse liability clause requires spouses to sign documents making them liable for all financial obligations. How often has this provision been enforced in the event of franchisee default?

What support and training is provided to franchisees, especially given that the Support & Training score is 97/100? How does this translate to operational assistance?

Are the 6 current units all profitable, and if not, how many are operating at a loss or below projections?

What is the franchisor's definition of 'ceased other' for the 2 units that closed in 2023, and does this category include voluntary sales or transfers not formally recorded as transfers?

Given the higher-than-typical renewal conditions count, are there minimum sales thresholds, operational standards, or facility renovation requirements that must be met to renew?

Can you provide a breakdown of the 3 litigation cases by party names and nature of dispute to assess whether there are systemic issues affecting multiple franchisees?

What happens to the exclusive territory if a franchisee does not renew? Can the franchisor assign it to a new franchisee, or must existing franchisees have right of first refusal?

The investment score of 79 is at the upper end for this category. Can you detail the total initial investment breakdown, including equipment, inventory, and working capital requirements?

Have any franchisees attempted to terminate or exit early since the system's founding, and if so, what were the outcomes and did the non-compete clause prevent them from competing?

What is the current status of the 2 pending litigation cases, including anticipated resolution timelines and potential impacts on franchisor operations or franchisee obligations?