The transfer fee of $24,750 is significantly higher than the typical range for pet service franchises. What specific services or support justify this elevated transfer fee, and are there circumstances where this fee could be reduced or waived?
#1
Gross sales figures across your system are 2-3 times higher than typical pet service franchises. Can you provide Item 19 details showing the number of units reporting, how many years of data are included, and what percentage of your franchisees achieved sales at or above the median?
#2
Your non-compete radius of 5 miles is considerably narrower than the typical 13.75-32.5 miles for this category. How do you prevent franchisor-approved encroachment, and what specific protections exist for franchisees in densely populated markets?
#3
The franchise agreement allows immediate termination for 20 non-curable defaults without a cure period. Can you provide a complete list of these 20 non-curable defaults and examples of how each has been applied in practice?
#4
Your agreement requires binding arbitration at the franchisor's headquarters location. How many franchisees have pursued disputes in the past 5 years, what were the outcomes, and what were the average costs incurred by franchisees?
#5
Personal guarantees are required from all shareholders and spouses must sign non-compete agreements. Are there any circumstances where these requirements can be modified, and how are spouse non-compete agreements enforced if a franchisee divorces?
#6
You require products and services from franchisor-approved suppliers only, with franchisor discretion to recommend or mandate pricing. What percentage of franchisee expenses are subject to franchisor-controlled pricing, and how often has pricing been mandated versus recommended?
#7
Complete maintenance and refurbishing are required before renewal, with franchisor determination of adequacy. What are the estimated costs franchisees typically face for renewal-required upgrades, and can you provide examples of renewals denied or conditioned on refurbishing?
#8
The agreement requires complete renovation or replacement of all furniture, fixtures, and equipment if deemed necessary. What percentage of renewal applications have required this level of investment, and what is the average cost of compliance?
#9
Your system grew from 22 to 40 units in 3 years with zero terminations or closures. Can you explain what factors drive this exceptional retention rate and whether any units have been transferred or ceased operations outside of your tracking metrics?
#10
One litigation case was filed against the franchisor during the 3-year period. Can you disclose the nature of this case, its current status if not resolved, the claims made, and any impact on franchisee operations or franchisor policies?
#11
The Investment Costs score is 0/100, significantly below the category typical range. Can you clarify what investment costs are not being captured in your franchise fee and what total capital requirement you recommend for prospective franchisees?
#12
Your agreement allows the franchisor to recommend or mandate operations, staffing, pricing, and quality standards. How frequently are mandates issued, and what happens if a franchisee's operational decisions or prices differ significantly from franchisor recommendations?
#13
The total potential term of 30 years exceeds typical franchise agreements. After 20 years, what franchise fees, technology fees, and renewal obligations would a franchisee face, and under what conditions could renewal be denied?
#14
Encroachment protection is indicated but territory is not exclusive. Can you define the specific protections provided and describe scenarios where the franchisor might approve a competing unit near an existing franchisee?
#15
Your franchise agreement contains 5 legal clauses scored 4-5 as franchisor-favorable. Which of these clauses are the most commonly negotiated by franchisees, and what modifications have you granted in past negotiations?
#16
Technology fees of $206 are charged. What specific technology systems and services are included, how often do fees increase, and are there any additional technology costs franchisees incur beyond this monthly fee?
#17
Your royalty rate of 7.0% plus 2.0% ad fund totals 9.0% of gross sales. Can you provide a 5-year projection of total fees and detail what specific marketing support the ad fund provides to individual franchisees versus system-wide initiatives?
#18