HobbyTown

The franchise fee of $49,500 is 24% above the category typical range. Can you explain the rationale for this premium pricing and what additional benefits or support justify this higher initial investment?

The transfer fee equals the entire franchise fee at $49,500. Has this high transfer cost been a barrier to franchisee mobility, and do you offer any programs to facilitate transfers between parties?

System health scores 25 out of 100, significantly below the category range of 32.3–70.0. What specific operational, support, or training challenges does this score reflect, and what corrective measures are in place?

The system declined from 110 units 3 years ago to 94 currently, a 14% reduction. Can you provide the reasons for these closures and describe what support or interventions are being implemented to stabilize and grow the system?

The 3-year turnover rate of 20.0% is above the category range of 5.33–17.68%. Is this due to voluntary exits, underperformance, or external market factors, and how does it compare to your internal projections?

The transfer rate of 5.3% exceeds the category range of 0.9–4.43%. What is driving the high volume of owner transfers, and does this indicate franchisee satisfaction issues or normal portfolio management?

Median sales of $1,264,475 significantly exceed the category range. Can you clarify whether all units achieve sales in this range, or if this represents a subset of higher-performing locations, and what percentage of units fall below this median?

With 0 terminations over the period and only 1 non-renewal rate, it appears the franchisor does not frequently terminate agreements. Under what specific conditions would the franchisor exercise termination rights, and how many units have been in default?

The non-compete clause restricts activity for 2 years within the protected territory or 'any other HobbyTown store territory.' How is 'any other HobbyTown store territory' defined, and could a departing franchisee be restricted from competing in territories far from their original location?

The renewal conditions count of 4 is notably below the category range of 6.0–8.0. Does HobbyTown impose fewer renewal conditions, and what specific conditions must be met to renew the franchise at the end of 10 years?

The renewal fee is listed as $0. Is renewal truly fee-free, or are there other costs (retraining, system updates, legal review) that franchisees should anticipate?

With a 30-day cure period for most defaults, how strictly is this enforced, and have franchisees been terminated for failures to cure within this timeframe?

Can you provide a breakdown of the 30 closures over 3 years by specific reason (insufficient sales, owner decision, supply chain issues, etc.) to help assess whether this reflects franchisee performance or systemic challenges?

The Item 19 financial data is provided, but how many units reported data, and does the financial performance data include all units or only a subset willing to disclose sales figures?

Support & Training scores 100, the highest in the system. What specific training, ongoing education, and operational support do franchisees receive, and how frequently are updates provided as retail market conditions change?

The litigation history shows 0 cases over the 3-year period. Has the franchisor pursued any informal disputes, settlements, or mediations that would not appear in formal litigation records?

Given the 2-year non-compete, what happens if a franchisee's initial 10-year term expires and they decide not to renew—can they immediately open a competing business in their territory or nearby?

Are there any industry-specific headwinds (e-commerce competition, category decline) that are contributing to the -5.1% 3-year unit CAGR, and how is the franchisor adapting the business model to address these challenges?

Can you provide references from franchisees who have transferred their units in the past 12–24 months so prospective franchisees can understand the transfer process and resale experience?

The agreement requires personal guarantees from all owners and shareholders. Are there any circumstances under which the franchisor would waive or modify this requirement, particularly for larger franchise operators?