Given the 24.1% turnover rate over 3 years and ongoing unit decline, what specific strategies is the franchisor implementing to stabilize and grow the remaining system?
#1
Of the 133 units that have exited since 2021, how many were in underperfoming territories versus markets where the franchisor chose not to support continued operations?
#2
The ad fund rate of 5.0% exceeds the typical 2.0-4.0% range for QSR franchises. How is this additional 1.0-3.0% being allocated compared to competitors, and what specific return on ad spend can you document?
#3
Why does the franchise agreement specify a 20-year initial term when the typical range for QSR franchises is 10.0-15.0 years? What justification supports the extended commitment?
#4
The non-compete clause is limited to 1 year and 10 miles, which is below the typical 2.0-year standard. Does this shorter restriction increase the risk of franchisees opening competing concepts immediately after exit?
#5
Can you provide the list of 14 non-curable defaults in the termination clause and explain how frequently each has been enforced in the past 5 years?
#6
With a 1.4% termination rate, only 21 units have been terminated since 2021. Does this low rate indicate lax enforcement, or are most underperforming units being voluntarily closed by franchisees?
#7
What is the average unit volume and profitability for the remaining 485 units, and how does this compare to the 154 units that have closed?
#8
The personal guarantee is capped at $10,000,000. In what circumstances has the franchisor enforced this guarantee, and what is the average recovery amount?
#9
Renewal requires completion of 'renovation and modernization' as a condition. What is the estimated cost of this requirement, and does it vary by location?
#10
Since territory is 'protected but not exclusive,' can the franchisor open company-owned or franchised units within 10 miles of an existing franchise?
#11
Of the 42 units that ceased operations for 'other' reasons in 2024 (the largest single category), what were these reasons and were any tied to franchisor supply chain, operational support, or other controllable factors?
#12
Why has the system experienced a -8.78% compound annual growth rate over 3 years while the QSR category typically grows at -1.44% to 7.65%?
#13
Can you provide details on the 47 unit closures in 2023, specifically whether any were concentrated in particular regions or were triggered by a franchisor initiative?
#14
What is the royalty structure if a franchisee renews after the initial 20-year term? Does the 5.0% royalty and 5.0% ad fund remain the same?
#15
The transfer fee is $5,000. Is there a right of first refusal for the franchisor, and what are the approval criteria for transferring a unit to a new franchisee?
#16
How many of the current 485 units are profitable, and what percentage achieve positive cash flow after all franchisor fees and operating expenses?
#17
Given zero litigation cases reported, are there pending or resolved disputes handled outside traditional court proceedings (e.g., arbitration or mediation)?
#18
Investment score of 56 is below the typical range of 69.0-78.0. What is the total initial investment required, and what support does the franchisor provide to ensure franchisees can achieve unit-level profitability?
#19