Given that this franchise has only 1 current unit and has been operating for approximately 1-2 years, what are the franchisor's growth targets and timeline for unit expansion?
#1
The non-compete radius of 25 miles significantly exceeds the typical range for quick service restaurants. What is the business justification for this extended geographic restriction, and how does it impact your ability to work in the food service industry post-exit?
#2
The franchise agreement lists 25 termination causes, above the typical range. Can the franchisor provide a detailed breakdown of these causes and clarify which ones are considered 'material' versus 'minor' breaches?
#3
What specific criteria or performance metrics must franchisees meet to successfully renew at the end of the initial 10-year term, and are renewal terms negotiable?
#4
Can the franchisor provide historical financial performance data or Item 19 information from the single current operating unit to demonstrate unit economics?
#5
The post-term restrictions prohibit participation in any culinary instruction business for 24 months within 25 miles. Does this restriction apply even if you sell the franchise to another operator, or only to the original franchisee?
#6
All disputes require binding arbitration in Los Angeles County, California. If you are located outside California, what are the estimated travel and legal costs you should budget for dispute resolution?
#7
The agreement requires use of only franchisor-approved suppliers for 5 categories including ingredients and supplies. Can you provide a list of approved suppliers and typical pricing to assess supply chain costs versus independent sourcing?
#8
With a 5-day cure period for payment defaults, what payment schedule and due date flexibility exists, and what are the consequences if payment is 1-2 days late?
#9
How does the franchisor define 'non-monetary defaults' that may receive 'additional reasonable time' to cure, and who determines what is 'reasonable'?
#10
The franchise fee is $35,000 with a $5,000 renewal fee. Are there any additional upfront costs not listed in the fee summary, such as training, initial inventory, or build-out expenses?
#11
Given the franchisees must provide personal guarantees with joint and several liability, what assets or collateral are typically required to secure these guarantees?
#12
Can the franchisor clarify which operational decisions require franchisor approval versus which are within the franchisee's discretion?
#13
What happens to the exclusive territory if you decide not to renew after the initial 10-year term? Can the franchisor immediately award it to another franchisee?
#14
The indemnification clause covers 'all claims arising from business operations.' Does this include claims from employees, customers, and third parties, and are there any caps on indemnification obligations?
#15
What training and ongoing support does the franchisor provide, and are there additional costs for training beyond the initial franchise fee?
#16
Can you provide references from the single current franchisee, including their profitability, operational challenges, and candid assessment of franchisor support?
#17
How does the franchisor handle situations where franchisees in the same territory underperform or create encroachment issues, given the emphasis on exclusive territories?
#18
What are the specific marketing and advertising requirements franchisees must maintain, and how is the 2.0% ad fund utilized?
#19