The system lost 5 units over 3 years and declined 4.76% in the past year alone. What is driving the increased closure rate, particularly the 4 closures in 2024 compared to 1 in 2023?
#1
Can you provide specific reasons why 7.5% of franchisees chose not to renew their agreements in the past year?
#2
The technology fee of 10 per month is substantially below the industry range of 100-500. What services and support are included in this fee, and are there additional technology costs not disclosed?
#3
The franchise fee of 29,500 is below the typical range of 31,125-50,000. Are there any hidden or additional startup costs beyond this initial fee that franchisees should expect?
#4
Can you explain why the transfer fee of 2,500 is significantly lower than the industry typical range of 5,250-19,500, and are there any restrictions on who you will approve for unit transfers?
#5
The System Health score is 23/100, well below the typical range of 46-70. What specific operational or support challenges is the system facing?
#6
The contract term is fixed at 10 years with no renewal options specified and renewal subject to franchisor discretion. What are the 8 conditions you mentioned for renewal eligibility, and how often do franchisees successfully renew?
#7
Can you provide the names and contact information for franchisees who closed in 2024, and what they cited as primary reasons for exit?
#8
What are the required capital expenditures for renovations, painting, and camera purchases mentioned in the renewal conditions, and what is the typical cost range?
#9
The non-compete clause restricts activity for 2 years within 50 miles. Does this apply to all photography work or only direct competition with Lil' Angels, and have any franchisees challenged this restriction?
#10
All disputes are resolved through binding arbitration in Cleveland, Bradley County, Tennessee. How many disputes have been arbitrated in the past 3 years, and were any ruled in favor of franchisees?
#11
Personal guarantees are required with unlimited scope. Can you clarify what specific liabilities franchisees personally guarantee, and are there any caps on franchisor indemnification?
#12
Do you provide Item 19 financial performance disclosures for existing franchisees, and if not, what average gross sales or profitability data can you share?
#13
The Contract Terms score is 55/100, below the typical range of 58-65. What specific contract provisions are more restrictive than typical for this industry?
#14
Can you explain the difference between your 2.5% termination rate and the 7.5% non-renewal rate? How does non-renewal differ from termination in terms of franchisee impact?
#15
Investment Costs score 86/100, which is at the typical benchmark. Can you provide a detailed breakdown of all costs required in year 1, year 2, and ongoing?
#16
Have any franchisees requested early termination, and if so, what were the circumstances and how were they resolved?
#17
The system has lost units in 3 consecutive years. Do you have growth plans or strategic initiatives to stabilize or grow the system in the next 2-3 years?
#18
What ongoing training, marketing support, and operational guidance do franchisees receive to support profitability, and how does support vary based on unit performance?
#19
Are there any pending litigation cases or regulatory issues not disclosed in the franchise disclosure document that prospective franchisees should know about?
#20