Given the 14.3% termination rate in the past year, what were the primary reasons for the 2 terminations in 2024, and were they related to performance, compliance, or other operational issues?
#1
Can you provide detailed information about the 3 units that closed or were terminated in 2023-2024? What circumstances led to each exit, and were there patterns in their performance or duration as franchisees?
#2
With a very low Financial Performance score of 40/100, does the franchisor provide Item 19 financial statements or any gross sales data to help prospective franchisees understand unit economics?
#3
The technology fee of $650/month is above typical for this category. What specific services, software, or support does this fee cover, and is it mandatory throughout the franchise term?
#4
Why is the royalty rate 5.0%, which is below the typical 6.0-7.0% range for home services franchises, and does this represent an introductory rate or the permanent rate?
#5
The system grew from 0 units 3 years ago to 14 units today. Can you explain the franchisor's background, when it began franchising, and what drove this rapid expansion?
#6
What is the average tenure of the 2 units that remained open through 2023-2024? Are there any units that have been operating since the beginning of franchising?
#7
The non-compete clause of 1 year is shorter than the typical 2.0 years for this category. What restrictions apply post-exit, and are there geographic limitations beyond the unspecified radius?
#8
You advertise territory as 'protected' but note it is not 'exclusive.' Can you clarify what protections exist and whether the franchisor can place additional franchisees or company-owned locations within the territory?
#9
With 0% transfer rate reported, have any franchisees attempted to sell or transfer their unit, and if so, what approval or transfer fee processes were involved?
#10
The franchise fee of $40,000 is below typical, but the $8,000 renewal fee and $10,000 transfer fee are standard. Can you provide a full breakdown of all initial and ongoing costs, including training, equipment, and working capital?
#11
What are the 20 non-curable defaults that allow immediate termination without notice? Can you provide examples of how these have been applied in the 2 terminations that occurred in 2024?
#12
How does the 10-day cure period for payment defaults and 30-day cure period for other breaches work in practice? Have any franchisees received cure notices, and how many were able to cure versus terminated?
#13
Given the mandatory binding arbitration and class action waivers in the dispute resolution clause, are there examples of disputes that have gone to arbitration, and what were the outcomes?
#14
The operational control section lists 5 categories of mandatory supplier restrictions. Can you provide the specific suppliers or vendor requirements for each category, and what flexibility exists for franchisees to negotiate alternatives?
#15
Personal guarantees are required from all owners, and spouses must execute confidentiality and non-competition agreements. Are there any cases where spouse agreements have been enforced post-exit?
#16
With the contract terms score of 70/100 (above typical), what aspects of the franchise agreement are most favorable to the franchisor compared to industry standards?
#17
How many prospective franchisees applied for this system in the past 12 months versus how many were approved, and what selection criteria are used beyond financial qualification?
#18
What ongoing support, training, and marketing assistance does the franchisor provide to justify the 5.0% royalty plus 2.0% ad fund plus $650/month technology fee?
#19
Can you provide references from all 14 current franchisees, and specifically from the 5 units that were operating 1 year ago to assess their satisfaction and financial performance?
#20