The franchisor has been named as defendant in 2 litigation cases in the past 3 years. What were the nature of these cases, and what were the outcomes or current status?
#1
System units declined 4.76% annually over 3 years (272 to 235 units). What is management's explanation for this contraction, and what initiatives are being implemented to stabilize or grow the system?
#2
Median gross sales of $232,612 are 19% below the typical range for home services franchises. What percentage of franchisees achieve gross sales above this median, and what is the range of sales performance across the system?
#3
The Ad Fund Rate of 2.5% exceeds the typical range of 1.0-2.0%. How is this ad fund deployed, and can franchisees see itemized accounting of how their contributions are spent?
#4
Non-renewal rate is 6.4% annually. What are the primary reasons franchisees choose not to renew, and are there performance or support issues driving these decisions?
#5
The franchise requires minimum annual gross sales in the top 90% compared to all franchised units. How is this performance threshold enforced, and what are the consequences for units that fall below it?
#6
Royalty rate is 7.5%, above the typical 6.0-7.0% range for home services. What additional services or support justify this higher royalty rate compared to competitors?
#7
Technology Fee of $104 monthly is significantly below typical rates. What technology systems and tools does this cover, and are there additional technology costs not included in this fee?
#8
The franchise agreement includes personal guarantees and spousal guarantees for franchisor financing. Under what circumstances does the franchisor require financing, and what are the typical terms?
#9
Renewal requires 'modernization or replacement requirement' compliance. What specific modernization investments are required at renewal, and what are typical costs involved?
#10
46 units closed in 2022, dropping to 26 in 2024. Was the 2022 closure spike due to a specific event, policy change, or economic factor, and how did the franchisor respond?
#11
Territory is protected but not exclusive. How does the franchisor define and enforce protection against internal competition or encroachment by other franchisees?
#12
Transfer Fee is $7,500 and Renewal Fee is $2,500. Are there other fees not listed (e.g., training, marketing fund, equipment) that franchisees should budget for?
#13
The franchise requires approval for products, services, inventory, equipment, and advertising. Can franchisees source these items from any approved vendor, or are there single-source suppliers, and what are the cost implications?
#14
Late payment penalties include $10 per day plus interest. What is the interest rate charged, and when do late fees begin accruing (e.g., immediately after due date)?
#15
System Health score is 38/100, well below the typical 50-70 range. What specific operational, financial, or strategic challenges is the system facing?
#16
Of the 26 units closed in 2024, how many were closed due to franchisee request versus franchisor action, and what were the primary causes?
#17
Can you provide references from 10-15 current franchisees, including both high-performing units and those in the bottom quartile of sales performance, to discuss their experiences?
#18