What specific disputes led to the 6 litigation cases against the franchisor over the past 3 years, and what were the outcomes of the 4 cases that have been resolved?
#1
What are the 2 pending litigation cases about, and what is the expected timeline for resolution?
#2
The Ad Fund rate of 4.0% exceeds the typical range for real estate franchises. How are these advertising funds allocated and audited to ensure franchisee benefit?
#3
Can you provide detailed financial performance data (Item 19 equivalent) showing median and average unit volumes, revenue ranges, and profitability metrics by franchisee cohort?
#4
What are the specific minimum sales performance levels required, and what happens if a franchisee fails to meet them?
#5
The non-compete clause is 0 years and 0 miles. Can you clarify what post-termination restrictions, if any, apply to franchisees who exit or are terminated?
#6
Of the 9 closures in 2024, how many were voluntary (owner decision) versus involuntary (franchisor-initiated or financial distress)?
#7
Why did terminations drop from 11 in 2023 and 12 in 2022 to only 1 in 2024? Did franchisor practices change, or did franchisee quality improve?
#8
What specific six conditions must a franchisee satisfy to renew for an additional 10-year term, and how frequently are renewals granted versus denied?
#9
The renewal fee amount is not disclosed. What is the cost to renew a franchise agreement for an additional term?
#10
Personal guarantees are required from individuals with 5% or greater ownership, including spouses. Are spouses' personal assets fully exposed to all franchise liabilities?
#11
The 5% late charge plus 1.5% monthly interest (18% annually) appears significant. Can you clarify when this applies and if payment plans are available?
#12
All equipment, software, hardware, and supplies must be purchased or leased from the franchisor or approved suppliers. What is the markup on these required purchases and how often are supplier lists reviewed?
#13
What audit rights does the franchisor retain, how often are audits conducted, and who bears the cost of audits?
#14
How many of the 15 closures in 2022 and 17 in 2023 were first-time or relatively new franchisees? Is there a higher failure rate in the first few years?
#15
The system grew from 238 units (3 years ago) to 262 units (current). What percentage of this growth came from new unit sales versus acquisitions of existing units?
#16
Technology fees are $250. Is this a one-time charge or recurring, and what specific technology services and updates does this cover?
#17
For the 6 litigation cases initiated against the franchisor, were any related to encroachment violations or territorial disputes, given the exclusive territory claim?
#18
Can you provide references from 5-10 franchisees who have been with the system for 3+ years and are currently profitable?
#19
What support and training is included with the franchise, and are there additional costs for ongoing training or certification renewal?
#20