Hospitality International Hotels (Scottish Inns, Red Carpet Inn, Master Hosts, Passport Inn, Downtowner Inns)

The Termination Rate of 4.0% is more than double the typical range for hospitality franchises. Can you provide specific reasons for the 8 terminations in 2024 and detail which defaults led to termination without a cure period?

Given the 15% Ad Fund Rate significantly exceeds typical hospitality franchise rates of 2.25%-3.5%, how is this advertising fund calculated, deployed, and reported? What specific marketing initiatives does it support?

The initial term of 5 years is substantially shorter than the typical 15-20 years for hospitality franchises. What is your rationale for this shorter initial commitment period, and how does this affect long-term unit stability?

The franchise agreement allows immediate termination for 11 specified defaults without a cure period. Can you detail each of these 11 non-curable defaults and provide examples of terminations that have occurred due to each?

The Transfer Fee of $2,500 is significantly lower than typical hospitality franchise transfer fees ($12,500-$50,000). Is this fee applied when franchisees sell their unit, and does the franchisor retain approval rights over the transferee?

The Franchise Fee of $10,000 is substantially below typical hospitality franchise fees of $35,000-$75,000. Does this lower fee include all initial training, technology setup, pre-opening support, and grand opening marketing assistance?

You have 1 pending litigation case. Can you disclose the nature of this case, the parties involved, the claims being made, and the expected timeline for resolution?

Over 3 years, the system closed 28 units while terminating 18 units. What percentage of the 28 closures were due to franchisor-initiated actions versus voluntary franchisee decisions? Can you provide specific circumstances for the largest closure years?

The personal guarantee clause requires all owners of 5%+ equity to guarantee full performance of franchise terms. If the franchisee defaults, are personal assets at risk, and can the franchisor pursue individual guarantors separately?

With 999 renewal options of 5 years each for a theoretical 5,000-year total term, what happens in practice? Have any franchisees successfully renewed beyond the first 5-year term, and what conditions, if any, trigger non-renewal?

There is no territory exclusivity and no encroachment protection provided. Can the franchisor open competing Scottish Inns, Red Carpet Inns, or sister-brand properties within your area without restrictions or compensation?

The Support & Training score of 67 falls below the typical range of 73.0-86.0 for hospitality franchises. What specific training is provided at franchise startup, how many days does it require, and what ongoing operational support is available?

The 3 litigation cases (with 1 pending) represent your litigation activity. Can you provide the outcome of the 2 closed cases and explain whether they involved disputes with franchisees, vendors, or regulatory agencies?

For the 15-day cure period on remediable defaults, does the franchisor provide written notice specifying exactly what breach has occurred and what steps the franchisee must take to cure?

What is the total initial investment required to open a Scottish Inns, Red Carpet Inn, or other brand unit, and does the $10,000 franchise fee represent the full upfront cost or a portion of total capital required?

The agreement requires general liability insurance be maintained, but what coverage limits are mandated, who must be named as additional insured, and what happens if a franchisee fails to maintain coverage?

With a -1.45% three-year CAGR and 4% termination rate, what is your strategic plan to stabilize and grow the system? Are you actively recruiting new franchisees, and what sales pipeline do you have?

If the franchisor terminates the relationship, does the franchisee have the right to continue operating under the brand name during any notice period, or must operations cease immediately?

What are the 11 non-curable defaults listed in your franchise agreement, and are there circumstances where a franchisee could dispute the franchisor's right to terminate for these causes?

The Investment Costs score of 94 is notably above the typical range (59.0-81.0). What does this metric measure, and does it reflect favorable investment economics or unusual cost structures?