What was the nature of the litigation case in which the franchisor was named as defendant, and has it been resolved? What were the allegations and outcome?
#1
The transfer fee of $25,000 is above typical for this category. Can this fee be negotiated, and what does it cover in the transfer process?
#2
The franchise fee of $49,000 exceeds the typical range for Coffee & Bakery franchises. How does this pricing justify relative to competitor offerings, and is there flexibility for multi-unit discounts?
#3
Your reported average gross sales of $4,459,911 are significantly higher than category norms. What percentage of your 11 units achieved sales within this range, and what are the primary revenue drivers?
#4
Item 19 financial performance data shows substantial variance between top and bottom quartile units ($8M+ versus $2M+). What specific factors account for this 4x sales differential between best and worst performers?
#5
The technology fee of $99 monthly is below typical range. What specific technology services and systems does this cover, and are there additional technology costs not included?
#6
You require all goods, ingredients, and supplies from franchisor-approved suppliers only. Can franchisees request exceptions for local suppliers, and how are approved supplier prices determined and reviewed?
#7
The renewal conditions require 7 specified criteria to be met. If a franchisee meets 6 of 7 conditions, can the renewal be negotiated, or is this a hard requirement for renewal rights?
#8
The renewal fee equals 50% of the then-current initial franchise fee. If your initial franchise fee increases to $60,000, would the renewal fee become $30,000? How frequently has the initial fee increased historically?
#9
Your territory is marked as protected with encroachment safeguards but not exclusive. What specific restrictions prevent franchisor encroachment, and how would you respond if the franchisor opened a company-owned location near my unit?
#10
Personal guarantees are required from all Control Group members, 10% owners, and their spouses. Does this personal guarantee extend to all liabilities, or are there specific carve-outs for franchisor negligence?
#11
You require $2 million general liability insurance per occurrence. Can franchisees obtain this through group plans or at individual rates, and what is the typical annual cost for this coverage in your system?
#12
Mandatory renovation and modernization are renewal conditions. What is the estimated cost and timeline for renovations, and who determines what constitutes a compliant modernization?
#13
With zero unit exits in 3 years, how many franchisees have you actively recruited versus how many have closed voluntarily? Are all 11 current units performing profitably?
#14
The non-compete is 2 years and 6 miles. If a franchisee exits, can they open a competing bakery outside the 6-mile radius after 2 years, and have any franchisees violated this clause?
#15
What is the historical renewal rate at the end of the initial 10-year term, and how many franchisees have exercised their renewal options since the brand's inception?
#16
The Investment Costs score is 67/100 (below typical 75). What capital requirements or operational costs are franchisees typically underestimating, and what is the typical time to profitability?
#17
Are there any franchisor-imposed pricing controls, and can franchisees set their own menu pricing or promotional pricing independently?
#18
What specific support and training does the franchise fee and ongoing fees cover, and are there additional costs for advanced training, menu development, or digital marketing consulting?
#19