What specific circumstances led to the 5 closures and 3 terminations in 2024, and were there common operational or financial issues among the affected franchisees?
#1
The technology fee of $639 monthly is significantly above the typical range for coffee and bakery franchises. What specific services and technology platforms are included, and is this fee negotiable?
#2
With 11 grounds for non-curable termination without notice or opportunity to cure, what are the most frequently cited violations that have led to the 15.0% termination rate?
#3
The 2-year, 50-mile non-compete is notably broader than typical. Can you explain the business rationale, and are there provisions to reduce the radius or duration based on circumstances?
#4
Current units declined from 21 to 16 over 3 years while the System Health score is 0/100. What specific improvements is the franchisor implementing to stabilize and grow the system?
#5
Median gross sales are $1.1 million. What percentage of franchisees meet, exceed, or fall below this benchmark, and what is the distribution of profitability across the system?
#6
The 5-year initial term followed by 1 renewal option is shorter than typical for this category. What happens if franchisees want to continue beyond 10 years, and are renewals discretionary or guaranteed?
#7
Are the 8 mandatory suppliers with no cost caps (including display cases, signage, and vehicle wraps) the sole approved vendors, or can franchisees source alternatives for competitive pricing?
#8
The 24/7 operations requirement is unusual for bakery franchises. Can you provide data on franchisee compliance rates and whether any have successfully negotiated modified hours?
#9
Given the 10.0% transfer rate and $17,500 transfer fee, what is the approval process for unit sales, and are there examples of transfers being denied?
#10
What renewal conditions beyond the 6 listed are required, and what does "required remodeling and modernization at franchisee's expense with no cost cap" typically entail in dollars?
#11
Can you provide the breakdown of the 4-unit net decline: how many were voluntary exits versus franchisor-initiated, and how many franchisees renewed versus declined renewal?
#12
The mandatory arbitration clause with class action waiver applies to Illinois and Maryland residents. What dispute resolution applies to residents of other states, and are there any pending arbitrations?
#13
The royalty rate of 7.0% combined with 2.0% ad fund and $639 technology fee totals approximately 9.0% + $639 monthly. Are there volume discounts or profit-sharing arrangements available?
#14
What is the average franchisee tenure in the system, and what percentage of franchisees have been with Hurts for the full initial term or beyond?
#15
How many of the 16 current units are company-owned versus franchised, and what is the franchisor's strategy regarding unit expansion and support levels?
#16
The termination clause lists 11 non-curable defaults. Can you provide specific examples of violations that triggered the terminations in 2024?
#17