Groutsmith

Can you provide specific details on the 6 terminations that occurred in 2024, including the stated reasons for each termination?

The termination rate of 12.2% is significantly above the typical range for home services franchises. What operational or performance issues are prompting this elevated termination activity?

Why has the system experienced net negative growth with a -0.67% three-year CAGR while maintaining unit count at 49-50 units?

Given the Financial Performance score of 40 and System Health score of 35 (both below typical ranges), can you provide Item 19 financial performance data or franchisee earnings disclosures?

The technology fee of $52 monthly is significantly below industry norms of $156.50-$599. What specific technology and support services does this fee cover?

Why is the franchise fee of $34,900 substantially lower than the typical range of $45,000-$59,900 for comparable home services franchises?

Can you explain the rationale for requiring a 15-year initial term when the typical home services franchise initial term is 10 years?

What conditions must a franchisee satisfy during the renewal process to renew for the second 15-year term?

The non-compete restriction extends 50 miles, above the typical 25-40 mile range. Can you explain why this broader restriction is necessary?

How many renewal conditions are included in the franchise agreement, and are there performance benchmarks or financial requirements to qualify for renewal?

Given the 2-year, 50-mile non-compete clause, what post-franchise business activities would be permissible for departing franchisees?

Can you provide details on the 3-year employee non-solicitation restriction mentioned in the post-term restrictions clause?

The personal guarantee clause requires principal owners to sign but not spouses. In cases of franchisee default, how is spousal property protected?

What specific events constitute non-monetary defaults that only require 10-30 days to cure versus the 15-day cure period for monetary defaults?

Can you clarify which of the 11 non-curable defaults listed in the agreement would result in immediate termination without opportunity to cure?

Why does the renewal fee of $500 remain unchanged for a second 15-year term, and are there other renewal costs not captured in this figure?

Are there any encroachment issues in existing territories, and how does the franchisor define and enforce territory boundaries?

What support, training, or operational improvements are planned to address the System Health score of 35, which is significantly below the typical range?

Can you provide a breakdown of the 12 units that have exited since 2022 (2 closed, 2 terminated, 2 transferred in 2022; 1 closed, 1 terminated, 2 transferred in 2023; 6 closed/terminated, 3 transferred in 2024) and whether any franchisees have disputed terminations?

Given the recent acceleration in closures and terminations, what is the franchisor's strategy to stabilize and grow the system?