Given the 25% transfer rate in 2024 (1 of 4 units), what were the reasons for the unit transfer and was it initiated by the franchisee or franchisor?
#1
The franchise fee of $30,000 is notably lower than the typical range of $35,000-$40,000 for this category. Is this a promotional rate, and if so, when does it expire or revert to standard pricing?
#2
Can you provide additional detail on the unit transfer that occurred in 2024? What were the circumstances, timeline, and whether encroachment was a factor?
#3
The technology fee of $150/month is below the typical range of $200-$500/month. What specific technology services are included, and are there any planned increases to this fee?
#4
With only 4 units currently operating, how many units does the franchisor project to have in the next 3-5 years, and what is the target market for expansion?
#5
The franchise agreement lists 24 termination causes (above the typical range of 15-23). Can you clarify which causes are most commonly invoked and provide examples of non-curable defaults?
#6
You mention only 5 days to cure both monetary and non-monetary defaults. Can you provide specific examples of non-monetary defaults that cannot be cured, and the reasoning behind the 5-day timeline?
#7
What happens to a franchisee's investment if the franchisor terminates the agreement for a non-curable default? Are there any buyback, refund, or compensation provisions?
#8
All disputes must be resolved through binding arbitration in Alameda County, California. Does the franchise agreement specify who pays arbitration costs, and has the franchisor ever used arbitration to resolve franchisee disputes?
#9
The franchise agreement includes waivers of class action rights and jury trial rights. Are there any exceptions to these waivers, and can franchisees negotiate these terms?
#10
All entity owners must personally sign as Principals with individual and collective liability. Does this mean spouses are also personally liable for franchise obligations, even if they are not involved in operations?
#11
The renewal requires 7 specified conditions including remodeling and repairs. What is the estimated cost of these remodeling/repairs, and who bears the cost—franchisor or franchisee?
#12
Median gross sales are approximately $1,169,900. How many units reported this data, and does it include costs of goods sold or net operating income?
#13
The non-compete is 2 years/10 miles. Does this apply only to fast casual restaurants or to any food service business, and are there any exceptions?
#14
With 0 litigation cases in the past 3 years, has the franchisor faced any regulatory actions, health code violations, or complaints with state franchise regulatory agencies?
#15
The franchise agreement includes indemnification that requires franchisees to indemnify the franchisor. What specific acts or omissions are covered, and are there any limitations on the franchisor's liability?
#16
Can you provide the complete list of the 24 termination causes so I can understand the full scope of conditions that could result in franchise termination?
#17
Given that this is a young system with only 4 units, what support, training, and marketing resources does the franchisor provide, and how does the Support & Training score of 98/100 translate to actual services?
#18
The transfer fee of $7,500 is below typical range. If a franchisee wants to transfer the unit to a family member or new buyer, what is the franchisor's approval process and criteria?
#19
What financial performance benchmarks or milestones must a franchisee meet during the initial 10-year term to be eligible for renewal, beyond the stated 7 renewal conditions?
#20