What specific circumstances led to the 1 case initiated against Interstate All Battery Center, and has it been resolved? What were the key issues?
#1
The non-compete restriction of 3 miles is significantly below industry norms of 5-25 miles. How does this limited geographic restriction protect franchisees from direct franchisor or neighboring franchisee competition?
#2
With a royalty rate of 5.0% below the typical 5.38-7.5% range, are there any conditions where this rate could increase, or circumstances that would trigger higher fees?
#3
Can you provide details on the 13 units that closed over the past 3 years? What were the primary reasons (financial underperformance, owner retirement, relocation, etc.)?
#4
The minimum performance standard requires achieving 75% of average gross sales or territorial exclusivity may be reduced after 2 consecutive years. What is the average gross sales benchmark, and how many franchisees currently fall below this threshold?
#5
How many franchisees are currently operating below the 75% gross sales performance standard, and how many have experienced territory reduction as a result?
#6
What support or intervention does the franchisor provide to franchisees at risk of underperformance before considering territory reduction?
#7
Are there any disclosed costs or fees beyond the listed items (royalty, ad fund, technology fee, transfer fee) that franchisees should be aware of?
#8
The $330 annual technology fee is listed but with no detail on what services or systems it covers. What specific technology platforms and support does this include?
#9
Given the mandatory binding arbitration clause, what recourse do franchisees have if disputes arise regarding territory reduction or performance standards?
#10
How are personal guarantees enforced in practice? Have there been cases where the franchisor pursued personal guarantees against individual franchisee owners?
#11
What is the renewal fee structure? The disclosure does not specify renewal costs, which could significantly impact long-term economics.
#12
How does the franchisor define 'protected territory' if it is not exclusive? Can the franchisor open company-owned locations or approve other franchisees within the territory?
#13
Of the 3-5 annual closures, how many involved franchisees that had completed their initial 10-year term versus those earlier in their agreement?
#14
The system has remained flat at 170 units for 3 years. What is the franchisor's growth strategy, and are new territories being added or converted to corporate locations?
#15
Can you clarify the indemnification clause? Are franchisees liable for defending the franchisor in claims even if the franchisor bears some responsibility?
#16
What specific gross sales figures are used to calculate the 75% performance threshold, and how frequently is this metric reviewed and updated?
#17