Can you provide details on the 3 franchisor-initiated litigation cases filed in the past 3 years, including the claims, outcomes, and amounts awarded?
#1
Why is your royalty rate of 3.0% significantly lower than the 5.0-6.0% typical for quick service restaurants, and does this represent a promotional rate subject to increase?
#2
You charge no monthly technology fee while competitors typically charge $110-$408. What technology services and systems are franchisees responsible for funding separately?
#3
Unit closures increased from 4 in 2022 to 6 in 2024. Can you identify the primary reasons for these closures and whether any were location-specific?
#4
The transfer rate has declined significantly from 10 units in 2022 to 5 units in 2024. Does this reflect restricted transfer approval policies or declining franchisee interest in selling?
#5
Your top quartile units generate $2,000,000 in sales, above the typical range. What is the median or average sales figure, and what percentage of units achieve top quartile performance?
#6
The renewal agreement includes 11 specified conditions. Can you provide the complete list and clarify which conditions are mandatory versus discretionary for renewal approval?
#7
Given the non-exclusive territory with no encroachment protection, what prevents the franchisor from opening additional L & L units near existing franchisees?
#8
What specific supplier approval and pricing control practices exist, and has there been franchisor-initiated litigation related to purchasing requirements or pricing disputes?
#9
Can you explain the personal guarantee requirement extending to franchisees' spouses, and whether this can be negotiated or waived in any circumstances?
#10
All disputes must go to binding arbitration with class action waivers. Has this arbitration clause prevented franchisees from joining collective claims against the franchisor?
#11
What is the Item 19 disclosure showing in terms of average unit volumes, sales ranges by quartile, and the percentage of units achieving profitability?
#12
Are there specific training, equipment, or maintenance upgrade requirements that might trigger the 11 renewal conditions, and what is the typical cost to satisfy renewal requirements?
#13
How many of the 3 franchisor-initiated litigation cases were filed in the past 12 months, and are any still pending despite the 0 pending count?
#14
Does the 2-year, 5-mile non-compete apply to all former franchisees or only those terminated for cause, and how has this been enforced?
#15
What percentage of the current 227 units are company-owned versus franchised, and what is the company's growth strategy regarding unit mix?
#16
Given the declining transfer rate, are there restrictions on transfer approval beyond the stated conditions, such as unit performance thresholds or buyer qualifications?
#17
Can you provide historical financial performance data showing trends in unit-level profitability over the past 3 years by unit age and location type?
#18