iFoam

Can you provide details on the 48 unit closures and terminations that occurred in 2024? What were the primary reasons—franchisor termination for underperformance, franchisee bankruptcy, or other causes?

What specific performance metrics or sales thresholds led to the 40% termination rate in 2024? Are there minimum revenue or activity requirements in the franchise agreement?

The franchise fee of $15,000 is substantially lower than the typical range of $45,000-$59,900 for this category. What is included in the initial investment, and what additional startup costs should a prospective franchisee anticipate?

Can you explain the 2 pending and resolved litigation cases? What were the core disputes, and how were they resolved?

The 5-year initial term is shorter than the typical 10-year term for home services franchises. What is the rationale for this shorter contract period, and what renewal terms would a franchisee negotiate after the initial term?

With no exclusive territory rights despite having protected territory, can the franchisor place additional iFoam units within the same geographic area? Under what circumstances can encroachment occur?

What changes in the business model or support structure occurred between 2023 (when the system added 87 units) and 2024 (when it lost 30 units)? Were there changes to training, marketing support, or operational requirements?

The non-compete clause restricts activity within 25 miles for 2 years post-termination. How is the 'franchised business territory' defined, and could a terminated franchisee operate in adjacent geographic areas outside the 25-mile radius?

Are there disclosed royalty, advertising, or technology fees, or are these fees variable or negotiable? The Franchise Disclosure Document (FDD) Item 6 should detail all recurring fees—can you clarify what ongoing payments are required?

What remedies are available if the franchisor places a competing unit in your protected territory despite encroachment protections? Has this occurred with any existing franchisees?

The binding arbitration clause requires disputes to be resolved in Bucks County, Pennsylvania. If you're franchisee located elsewhere, what are the estimated costs of arbitration, and does the franchisor cover arbitration costs in any circumstances?

Can you provide Item 19 financial performance data broken down by unit age, location type (residential vs. commercial), and franchisee experience level? The aggregate numbers may mask wide variability in actual unit performance.

14 non-curable defaults result in immediate termination without cure opportunity. Can you provide the complete list of these defaults, and which ones are most frequently cited in actual terminations?

The transfer fee is the greater of $10,000 or 20% of the then-current territory value. How is 'territory value' calculated, and could this percentage create prohibitively high transfer costs as franchisees attempt to exit?

Have any class action or multi-unit terminations occurred? With a 40% termination rate, were terminations concentrated among certain franchisees, regions, or time periods?

What training and ongoing support is provided, and how has support changed during the rapid expansion and contraction phases? Are field support consultants available, and what is the franchisee-to-support-staff ratio?

The System Health score is 0/100. What specific metrics or data points contributed to this score, and what weaknesses in operations, compliance, or financial management does this reflect?

What is the current franchisee satisfaction or retention rate among the 90 remaining units, and are there common complaints or requests for policy changes in recent renewal negotiations?

Does the franchisor offer financing options, and if so, what are the terms and interest rates? With a lower franchise fee but significant turnover, what percentage of franchisees rely on franchisor-sponsored or franchisor-approved financing?

The interest rate on late payments is 1.5% monthly (18% annually). Has this been applied frequently, and are there circumstances where payment timelines can be extended or modified?