The transfer fee of $26,250 is significantly higher than the typical range for pool fence franchises ($7,500-$15,000). What justifies this elevated transfer fee, and is it negotiable?
#1
Your royalty rate of 3.0% is substantially lower than competitors' typical 6.0-8.0%. Does this favorable rate apply equally to all franchisees, and are there any circumstances under which it could increase?
#2
The system has grown from 1 unit three years ago to 10 units today with 100% growth in the past year. What growth targets are being set for franchisees, and what support exists if these aggressive expansion targets aren't met?
#3
One unit transferred and one ceased operations in 2024. Can you provide details on why the unit ceased operations and what circumstances led to the transfer? Were there performance or relationship issues?
#4
Average gross sales of $554,592 are below the typical range for landscaping franchises. What factors explain this lower-than-average performance, and do you have data showing whether sales are trending upward?
#5
The initial term is 5 years, significantly shorter than the typical 10-year initial term. What is the strategic reason for this shorter term, and does the franchisor have renewal preference rights that could disadvantage franchisees?
#6
Minimum performance standards tied to specific gross sales targets can result in termination. What are the exact sales targets per territory, and how are they adjusted for market differences or seasonal variations?
#7
Personal guarantees are required from all owners and spouses for all obligations. Can you explain what specific non-monetary obligations spouses could be liable for, and are there limitations on this guarantee?
#8
Late payments carry 1.5% monthly interest. What is the grace period before interest is assessed, and does this rate apply to all types of late payments or only royalties?
#9
The non-compete restriction applies within 25 miles of any LSPF territory. With only 10 units nationwide, how is '25 miles of any geographic area awarded to other LSPF businesses' interpreted and enforced in sparsely populated regions?
#10
No litigation cases have been reported. Has the franchisor had any disputes with franchisees that were resolved through arbitration or settlement rather than court litigation?
#11
The Item 19 financial performance disclosure shows average sales of $554,592, but does this include all units or only those that have been operating for a full year? How many units reported this data?
#12
With a 10.0% transfer rate in the past year, do you track the reasons franchisees seek transfers? Are transfers typically to family members, third parties, or back to the franchisor?
#13
What specific training and support are provided during the initial term to help franchisees reach the minimum sales targets, particularly given the below-average sales performance data?
#14
The renewal fee is $3,000 for subsequent 5-year terms. Are there any other costs associated with renewal, such as updated training, equipment, or system technology fees?
#15
Can you provide contact information for the 9 other franchisees (or a representative sample) so that prospective franchisees can conduct independent due diligence interviews?
#16
The franchise agreement mentions protected but non-exclusive territory. How do you handle situations where two franchisees' territories or service areas overlap, and what dispute resolution process exists?
#17