HoneyBaked

The ad fund rate of 3.25% is significantly higher than typical for retail franchises (1.0-2.0%). How is this ad fund allocated, and what specific marketing initiatives does it support for franchisees?

Your franchise fee of $20,000 is notably lower than the typical range of $25,000-$40,000 for retail franchises. Are there any restrictions or reduced support services that apply to franchisees paying this lower fee?

The transfer rate of 6.8% is above the typical range of 0.9-4.43%. What factors are driving these higher ownership transfers, and do you have concerns about unit stability given this elevated transfer activity?

Can you provide details about the 1 litigation case filed against the franchisor over the past 3 years? What was the nature of the dispute, and has it been resolved?

Your Item 19 financial performance data shows median gross sales of $1,235,325, which is notably higher than typical for retail franchises. How many units reported sales data for this Item 19, and does this represent a representative sample of your system?

What percentage of your 448 current units are newly transferred (within the last 2 years) versus units under original franchisee ownership?

The termination rate is very low at 0.5%. What specific conditions would trigger a franchisee termination under the franchise agreement?

Can you clarify the difference between your 13 non-curable defaults and the 6 curable defaults with 7-30 day cure periods? What happens if a franchisee doesn't cure a violation within the specified timeframe?

The renewal conditions require franchisees to be in non-default status and meet 7 conditions. How often are franchisees denied renewal, and what are the most common reasons for non-renewal?

Your non-compete clause is 2 years/15 miles. How strictly does the franchisor enforce this, and have there been disputes with franchisees regarding competitive activities?

Since territory is protected but not exclusive, how does the franchisor determine whether a new unit location would encroach on an existing franchisee's territory?

Can you provide the breakdown of the 22 units that exited in 2023 (4 closures + 14 transfers + 4 ceased other)? Were any of these transfers due to financial difficulties or performance issues?

The joint and several personal guarantee requires all owners with 10% or greater equity interest to guarantee the agreement. Under what circumstances has the franchisor exercised spouse guarantees?

What is the average payback period for a franchisee based on the reported Item 19 sales data and typical operating costs?

How many of the 1 pending litigation case has potential impact on franchisee operations or franchisor-franchisee relationships?

Your bottom quartile sales are $747,015. What support or intervention does the franchisor provide to underperforming units?

Can you provide a year-by-year breakdown of which specific legal/contract breaches led to the 3 terminations in 2024?

The technology fee is $152 with no specified frequency (monthly/annually). Is this a recurring fee, and what technology platforms or tools does this cover?