La Madeleine

The technology fee of $2,500 monthly is 5-24 times higher than typical for this category. What specific services, software, or technology does this fee cover, and how is it justified relative to competitors?

System unit count declined from 96 to 91 over 3 years despite positive gross sales. What factors drove the net loss of 5 units, and what is management's strategy to reverse this decline?

The termination rate of 1.1% exceeds typical benchmarks. Can you provide details on the specific reasons for the 1 termination in 2024 and whether it was franchisor-initiated or unit-initiated?

Financial performance shows strong average sales of $2.2M+, but the system is shrinking. What percentage of current units are achieving or exceeding the median sales figure, and what factors distinguish top performers from underperformers?

The non-compete period is only 1 year, half the typical 2-year standard. If a franchisee exits, what prevents them from opening a competing café within the same 10-mile radius after 12 months?

Territory is protected but not exclusive. How does the franchisor define 'protected' status, and can you provide examples of situations where another La Madeleine location might be placed within a franchisee's territory?

The franchise agreement requires mandatory binding arbitration with jury trial waivers. Has this arbitration clause been tested in any disputes, and what are typical costs and timelines for arbitration under this framework?

All products and services must be purchased from franchisor-approved suppliers. What happens if a franchisee finds a lower-cost supplier, and what is the process for requesting supplier approval exceptions?

The termination clause specifies cure periods as short as 24 hours for safety issues. Can you provide the complete list of 19 non-curable defaults and clarify what constitutes unsafe product issues that cannot be cured?

Renewal conditions require meeting 9 specified criteria and completing renovations. Can you detail these 9 conditions, provide estimated costs for required modernizations, and clarify what happens if a franchisee cannot meet these conditions?

The renewal fee is 50% of the then-current franchise fee. If the initial $40,000 fee increases over the next 10 years, what is the franchisor's historical practice for franchise fee increases, and has any unit renewed at the higher rate?

Two units transferred ownership in 2022 with a $20,000 transfer fee. What approval rights does the franchisor have over buyer qualifications, and have any transfer requests been denied?

With 91 total units and shrinking system size, what is the minimum viable unit count to sustain franchisor support, training, and marketing programs?

Personal guarantees require all owners and officers to provide joint and several liability. In community property states, does the spouse guarantee survive divorce or separation, and has this created disputes?

Item 19 financial performance data is available. How many units reported 2024 sales figures, and does the franchisor provide unit-level profitability data (revenues minus cost of goods sold, labor, and rent)?

The initial term of 10 years is substantially longer than typical renewal structures. What is the reasoning for a 10-year initial commitment, and are there early renewal or extension options available before year 10?

In 2023-2024, there were 2 closures and 2 terminations out of 90-91 units. Were these units replaced by new franchisees, or did the franchisor strategically reduce system size?

The non-compete restricts competing within 10 miles of the former location and 5 miles of any other La Madeleine. Has this radius been challenged as unreasonably broad, and what is the franchisor's enforcement record?

Dispute resolution is mandatory binding arbitration after mediation fails. What are the typical arbitration costs, who selects the arbitrator, and does the franchisor or franchisee typically prevail in arbitration disputes?

Operating costs are presumably high given the $2.2M average sales figure. Can you provide a sample unit-level profit and loss statement showing rent, labor, cost of goods, and franchisor fees for an average performer?