The transfer fee of $25,000 exceeds the typical range for senior care franchises. What costs and services are included in this transfer fee, and how does it compare to competitor franchise transfer fees?
#1
Your system has grown at 35.7% compound annual growth over 3 years. What percentage of this growth is attributed to new franchisee recruitment versus same-unit expansion or organic growth?
#2
With zero documented exits across all categories since 2022, can you provide details on the screening and qualification process for new franchisees to understand what may contribute to retention?
#3
The ongoing fees score of 60/100 is below the typical range for this category. Can you itemize all recurring monthly costs including the minimum $1,000 royalty, advertising contributions, and technology fees?
#4
What specific mandatory remodeling or upgrading requirements must franchisees complete to qualify for renewal after year 10, and what is the typical cost range?
#5
Can you explain the rationale for the $12,500 renewal fee and whether this is waived or credited if a franchisee has made facility improvements?
#6
Since your system only has 5 current units, how does the national advertising fund operate, and what percentage of franchisees' contributions are spent on local versus national advertising?
#7
All disputes are resolved through binding arbitration in Douglas County, Nebraska. For franchisees outside Nebraska, what are the typical costs and logistics of arbitration in your designated location?
#8
Personal guarantees are required from all owners and spouses. Will the franchisor accept limited personal guarantees for specific obligations, and are there any exceptions for corporate entity structures?
#9
The 18% annual interest rate on late payments is specified in your financial obligations. Is this rate negotiable, and does it apply to all types of late payments or only royalties?
#10
Your non-compete radius of 25 miles is fairly broad for the senior care industry. How is this radius measured (as the crow flies or driving distance), and can it be adjusted based on territory density?
#11
With only 5 franchised units, what is the breakdown of franchisor support staff in training, operations, marketing, and field support?
#12
Can you provide references from all current franchisees, and are you willing to arrange calls with at least 2-3 units that have been operating for more than 2 years?
#13
The average gross sales of $1,045,825 is reported in Item 19. What percentage of this figure represents net revenue after direct labor costs, and what is the typical EBITDA margin?
#14
Your minimum monthly royalty of $1,000 means franchisees pay at least $12,000 annually regardless of sales. At what gross sales volume does the 6% royalty exceed the minimum royalty threshold?
#15
How does Legato Living define and protect exclusive territory boundaries, and what happens if demographic or customer demand changes suggest territory adjustment?
#16
Can you clarify the 8 specified conditions for the one renewal option at year 10? Which conditions are outside the franchisee's control, and what is the historical renewal rate?
#17
Given the 2-year post-term non-compete within 25 miles, can you provide examples of what business activities would and would not violate this restriction?
#18