KFC US, LLC (Non-Traditional)

The termination rate of 10.3% is 10 times higher than the typical range for QSR franchises. What specific operational or financial performance metrics trigger franchise terminations, and how many of the 7 terminations over 3 years were related to performance versus non-payment?

Given the pending litigation case against the franchisor, what is the nature of this dispute and what outcome or settlement is anticipated?

The system declined from 34 units in 2021 to 29 units currently. Is this contraction consistent with company strategy, or does the franchisor view this as concerning?

With a 10% one-year turnover rate, what percentage of closures in 2024 were franchisor-initiated terminations versus voluntary owner exits?

The franchise agreement contains no renewal options and specifies zero renewal conditions. How do existing franchisees plan for contract expiration, and does the franchisor intend to renew expiring agreements?

The non-compete clause of 1 year/10 miles is below industry standard of 2 years. Does the franchisor view this shorter restriction as a competitive disadvantage, and would stronger non-compete terms be negotiable?

What is the financial profile of the 5 units closed in 2022 and 3 units closed in 2024—were they underperforming units, or were there external factors?

The royalty rate of 9.5% exceeds the typical 5-6% range. How does this higher royalty compare to competitor franchises in the non-traditional QSR segment?

Transfer fee of $3,000 is 40-60% below industry standard ($5,000-$15,000). Is this low transfer fee designed to encourage resale activity, and does the franchisor experience high turnover from transfers?

System Health scores 27/100, significantly below the typical 50-75 range. What specific issues contribute to this low score, and what improvements is the franchisor implementing?

Territory score of 35/100 is well below typical range, and the agreement specifies non-exclusive territory with no encroachment protection. How does the franchisor prevent cannibalization if multiple franchisees can operate in overlapping areas?

Does the franchisor offer support or intervention to struggling units before termination is initiated, or is termination the primary remedial action?

The median gross sales of $873,053 is provided—what are the profit margins and net income figures for operating units, and how many units operate profitably?

Are there any material disputes or claims by terminated franchisees regarding the reasons for termination or the fairness of the termination process?

The franchise agreement requires personal guarantees with liability capped at $250,000-$5,000,000. Can you clarify the liability cap structure based on number of outlets and provide examples of how this has been applied?

With no renewal rights specified, what happens to franchisees who have invested significantly in their locations when their 10-year contract expires—does the franchisor typically renew or are franchisees required to exit?

What specific training and ongoing support does the 90/100 Support & Training score reflect, and are there documented performance differences between franchisees who utilize support versus those who do not?

Are there any planned system growth initiatives, or does the franchisor anticipate continued unit decline over the next 3 years?

How many of the 29 current units are non-traditional format versus traditional KFC restaurants, and what is the relative profitability and exit rate for each format?

The Technology Fee of $297.39 monthly appears in the disclosure—are there additional mandatory technology or marketing costs not reflected in ongoing fees, and what has been the trend in these fees over the past 5 years?