The technology fee of $45 monthly is substantially lower than typical for this franchise category (typical range $156.5-$599.0). What specific technology services and tools are included in this fee, and are there any additional technology costs or future planned increases?
#1
Your system grew from 1 unit three years ago to 3 units currently, representing 44.2% annual CAGR. What is the target unit growth for the next 3-5 years, and what specific support or marketing investments will the franchisor provide to achieve this growth?
#2
One unit closed in 2022. Can you provide details about the circumstances of this closure, including whether it was voluntary, franchisor-initiated, or due to specific market conditions?
#3
The contract specifies a 10-year total potential term, which is shorter than typical for home services franchises (typical range 15.0-20.0 years). Why is the total potential term limited to 10 years, and under what conditions can franchisees extend beyond this period?
#4
The non-compete clause restricts competition for 2 years post-termination within the territory and 'any other Hole in the Wall business territory.' How is 'any other Hole in the Wall business territory' defined, and what geographic radius does this realistically cover?
#5
Your contract includes binding arbitration with a class action waiver. If disputes arise with the franchisor, what are the estimated costs and timelines for arbitration, and has this process been used to resolve franchisee disputes previously?
#6
Late payment penalties include a $100 fee plus 18% annual interest. Has this penalty been assessed to any franchisees, and are there provisions for waiving or reducing penalties in cases of good-faith payment delays or disputes?
#7
The franchisor's higher of 6% revenue or minimum monthly royalty structure creates variability in costs. What is the minimum monthly royalty amount, and how often does the franchisor adjust this minimum based on economic conditions or unit performance?
#8
What was the financial performance of the unit that closed in 2022? Did it fail to meet minimum sales thresholds, experience operational issues, or close for other reasons?
#9
Renewal conditions count of 5 is below the typical range of 6.0-9.0. What are the specific conditions franchisees must meet to renew, and are there objective performance benchmarks or subjective franchisor discretion involved?
#10
Your system currently has only 3 units. What support infrastructure exists for franchisee training, marketing, operations, and field support given this limited scale? How many headquarters staff support these 3 units?
#11
Can you provide a detailed breakdown of the average gross sales of $1,181,925 by unit, including minimum and maximum unit volumes, to understand the range of unit performance?
#12
What percentage of franchisees achieve or exceed the average gross sales figure disclosed in Item 19? How long does it typically take new franchisees to reach profitability?
#13
The contract includes a $5,000 renewal fee. Are there any other renewal-related costs, such as retraining, equipment upgrades, or re-certification fees, beyond the stated renewal fee?
#14
What is the basis for the $15,000 transfer fee? Can franchisees sell to third parties, and does the franchisor have right of first refusal or approval rights that could limit transfer opportunities?
#15
Have there been any changes to the franchise agreement terms, fee structure, or operational requirements since the first franchise was granted? If so, what changes occurred and when?
#16
With zero litigation cases over the franchise's history, can you confirm the length of time the franchise has been operating, and has the franchisor had any regulatory issues, complaints to state franchise authorities, or informal disputes with franchisees?
#17
What is the franchisor's policy for protecting franchisees if another Hole in the Wall location opens within a certain radius of an existing franchise territory?
#18
The contract mentions 'applicable minimum monthly royalty fee' but no specific amount is disclosed in the FDD summary. What is the actual minimum monthly royalty, and how does it compare to the 6% revenue-based royalty for a typical home services unit?
#19
Post-term non-compete covers 2 years but the geographic scope for 'any other Hole in the Wall business territory' is undefined. If new franchises open in adjacent areas after your 10-year term ends, would you be prohibited from competing there during the 2-year restriction period?
#20