The franchise has grown 18.2% annually over 3 years—substantially above the category average. What specific factors do you attribute to this accelerated growth, and is this pace sustainable?
#1
Gross sales of $2.14 million median are 18-35% higher than comparable fast casual concepts. Can you break down the revenue drivers behind this outperformance by unit type (location, format, market)?
#2
Your non-compete radius of 3 miles is significantly narrower than the typical 5-20 mile range for this category. How does this restricted radius protect existing franchisees from market saturation and new unit cannibalization?
#3
The franchise agreement includes 25 termination causes—above the typical 15-23 range. Can you provide a detailed list of these termination triggers and clarify which are performance-based versus discretionary?
#4
With zero terminations recorded, how many franchisees have been placed on performance improvement plans or received formal notices in the past 3 years, even if termination didn't result?
#5
The dispute resolution clause requires binding arbitration at your principal office location. What are the typical costs and timeline for franchisees involved in arbitration with you, and do you have data on arbitration outcomes?
#6
Personal guarantees are required with joint and several liability for all owners. Can you clarify how this liability applies in multi-owner structures, and have any personal guarantees been enforced in the past 5 years?
#7
How do you manage the tension between rapid unit growth (29% in the past year) and maintaining quality control? Have you implemented any saturation studies or territorial planning in your expansion markets?
#8
Given that bottom-quartile units still generate $1.21 million in sales, what is your minimum revenue expectation for new franchisees, and what support do you provide to underperforming locations?
#9
Can you provide a list of all 1 transfer in 2024 and the 2 transfers in 2022—specifically the reasons for transfer (financial distress, retirement, relocation) and whether any involved disputes?
#10
Your Investment Cost score of 61/100 is below the typical range of 73-77. What components of the initial investment package fall outside industry norms, and why?
#11
The franchise includes encroachment protection but not exclusive territory. How do you define and enforce encroachment, and have you had disputes with franchisees over new unit placement?
#12
With a 10-year initial term and renewal option, what happens to franchisees who don't meet renewal criteria? Have any franchisees been denied renewal in the past 5 years?
#13
The renewal fee equals the transfer fee ($17,500). Is this fee negotiable, and does it apply regardless of whether the franchisee has met all obligations?
#14
Can you provide Item 19 financial performance data broken down by unit age, location type (urban/suburban), and state to help assess unit economics in different markets?
#15
The technology fee is listed as N/A. What technology systems are mandatory or recommended for franchisees, and what are the associated costs?
#16
With zero litigation over 3 years, have franchisees raised informal complaints or concerns resolved outside formal proceedings? Can you share a summary of common franchisee concerns?
#17
The agreement requires indemnification for all third-party claims including attorney fees. Have you had franchisees request limitations on this obligation, and is there a cap or carve-out for franchisor negligence?
#18