The Technology Fee of $2,000/month is 4-5 times higher than typical for this category. What specific technology services and support does this cover, and is this fee subject to annual increases?
#1
The Ad Fund Rate of $999.99/month is significantly above the typical 1.0%-2.75% range. How are these funds allocated, audited, and reported to franchisees?
#2
The Transfer Fee of $25,000 exceeds the typical range by approximately $5,500-$19,750. Under what circumstances is this fee waived, reduced, or refunded?
#3
Your initial franchise term of 35 years is extraordinarily long compared to the typical 5-10 year range. What is the rationale for this extended term length, and what exit opportunities exist before the initial term expires?
#4
With a total potential term of 70 years (35-year initial plus 35-year renewal), what conditions must franchisees meet to qualify for renewal, and how is the renewal fee of $2,500 structured?
#5
The Termination Causes count of 11 is below the typical 12-21 range. Can you provide the complete list of specific actions or inactions that would trigger franchisor termination rights?
#6
The Dispute Resolution clause mandates binding arbitration and waives class action rights. Have franchisees disputed this clause, and are there any arbitration outcomes or disputes currently pending?
#7
Personal guarantees are required from all officers, directors, managers, partners and owners. If a franchisee entity dissolves, what recourse does the franchisor have against individual guarantors?
#8
The Indemnification clause requires franchisees to indemnify the franchisor against all claims. Are there any caps on this indemnification, and have there been significant indemnification claims?
#9
With zero units reported currently, 1 year ago, and 3 years ago, is this a newly launched franchise? If so, when did franchising begin and how many franchisees have actually signed agreements?
#10
Zero litigation cases over 3 years is unusual for the franchise industry. Has the franchisor taken any legal action against franchisees that was resolved outside the court system, or have all relationships remained amicable?
#11
The Royalty Rate is 6.0% plus the $2,000 technology fee—combined, how does the total ongoing obligation compare to comparable Business Services franchises?
#12
What is included in the Support & Training that scores 100/100, the highest possible score? Can you provide a detailed breakdown of initial and ongoing training programs?
#13
For the Cure Periods (15 days for monetary defaults, 30 days for other curable defaults), what specific actions constitute a monetary default versus other defaults?
#14
The Non-Compete clause is 2 years/25 miles. After franchise termination or non-renewal, are franchisees permitted to operate a competing business outside the 25-mile radius, or are there additional restrictions?
#15
Can you clarify the relationship between the $49,500 Franchise Fee and the Item 19 financial disclosures? How many franchisees are currently operating, and how recent is the financial performance data?
#16
The Renewal Fee of $2,500 seems low relative to the $49,500 initial Franchise Fee. Are there additional costs or conditions associated with renewal beyond this fee?
#17
Are there any financial performance guarantees, revenue minimums, or unit development requirements in the franchise agreement, and what happens if franchisees fail to meet them?
#18
Has the franchisor ever granted any franchisees exceptions, variances, or waivers to the standard agreement terms, particularly regarding fees, territory, or term length?
#19