Howard Hanna Real Estate Associates

Given that the Risk Factors score of 74 is above the typical range for real estate franchises, what specific risk factors are driving this elevated score?

Can you explain the spike in unit closures in 2023 (22 units) compared to 2022 (8 units) and 2024 (17 units)? Were these primarily voluntary closures or due to operational challenges?

Your turnover rate of 3.8% is below the typical range for real estate franchises. What factors contribute to this lower turnover and higher unit retention?

The franchise agreement specifies renewal at the franchisor's sole discretion with only 4 renewal conditions. What happens if a franchisee meets all renewal conditions but the franchisor declines to renew?

Non-compete restrictions apply for 2 years or the remainder of the original term, whichever is greater. Can you clarify how this applies when the original term is 10 years—would a former franchisee be restricted for 10 years?

The territory is protected but not exclusive. How does the franchisor define 'encroachment' and what is the process if you believe another franchisee is operating in your protected area?

Personal guarantees are required from all owners. Under what circumstances might the franchisor pursue personal liability against individual owners beyond the franchise entity?

Litigation is mandated in the state/federal courts where the franchisor's principal office is located with mandatory jury and class action waivers. Where is the franchisor's principal office located, and what is the cost implication for franchisees?

There are 15 non-curable defaults in the agreement. Can you provide the full list and clarify whether termination is immediate upon discovery of a non-curable default or if there is any grace period?

The agreement specifies cure periods ranging from 5 days for legal violations to 30 days for other material breaches. How is 'legal violation' defined, and what examples would trigger the 5-day cure period?

What is included in the $75 monthly technology fee, and how is this fee adjusted over time? Is it fixed for the 10-year term?

Since no Item 19 financial performance disclosures are provided, what financial metrics or benchmarks can you share regarding average revenue, commissions, or profitability for existing franchisees?

How many units ceased operations for reasons other than closures or transfers in 2023 (4 units) and 2024 (1 unit)? What circumstances led to these 'ceased other' exits?

Given the 10-year initial term with no renewal options specified, what happens at the end of the 10-year term if the franchisor does not offer renewal?

The transfer fee is $6,250. Are there approval requirements or conditions beyond payment that could prevent a franchisee from selling their unit?

What support, training, or system resources are provided to help franchisees achieve the lower-than-average turnover rate your system maintains?

Are there any litigation cases currently pending or under arbitration that are not reflected in the litigation data provided?

The agreement prohibits involvement in competing real estate services within 25 miles of the territory for 2 years post-termination. How does this apply if the franchisor does not renew at the end of the 10-year term?

What are the specific 4 renewal conditions beyond 'full compliance with the agreement and payment of renewal fee'? Are there production quotas or performance metrics required?