Magnuson Franchising, LLC

Why is the royalty rate of 8.0% higher than the typical 5.0-5.5% range for comparable hospitality franchises?

The franchise fee of $10,000 is substantially lower than the typical $35,000-$75,000 range. What specific support, training, and initial inventory or equipment does this fee cover?

Given the extremely short initial term of 5 years compared to the typical 15-20 years for this category, what is the franchisor's strategy for unit stability and long-term franchisee commitment?

Can you explain the recent rapid growth from 4 units in 2022 to 11 units in 2024? What is driving this expansion and what are the franchisor's growth projections for the next 3-5 years?

The franchise has had zero closures, terminations, and transfers since 2022. Can you provide examples of actual unit performance metrics and profitability to validate this apparent 100% retention?

What was the nature and outcome of the single litigation case initiated against the franchisor? How was it resolved?

Since the franchise is non-exclusive with no territorial protection, how does the franchisor prevent encroachment when placing new units? What is the process for managing proximity between franchisees?

The contract requires binding arbitration in Casper, Wyoming, which may be geographically inconvenient for franchisees in other regions. Can this location be negotiated, or are there local arbitration alternatives available?

Personal guarantees are required from all owners and their spouses. Are there any circumstances under which the franchisor will negotiate partial guarantees or release guarantees after a certain performance period?

What specific indemnification obligations apply to franchisees, and can you provide examples of claims the franchisor has pursued under the indemnification clause?

Item 19 financial performance data is not disclosed. Can the franchisor provide average unit volumes (AUV) and profitability data for existing franchisees, either under confidentiality agreement or as a range?

With only 11 current units, how mature is the franchise system? What are the franchisor's long-term plans for scaling and sustainability?

What renewal terms apply after the initial 5-year term? Is there a renewal fee, and can franchisees expect favorable renewal terms or substantial fee increases?

Are there any transfer restrictions or approval requirements if a franchisee wishes to sell their unit? What are the typical costs and timeline for transfer approval?

Given the low initial franchise fee relative to industry standards, what are the total first-year costs including real estate, build-out, inventory, working capital, and other startup expenses?

Can you provide contact information for 3-5 current franchisees who are willing to discuss their experience with operations, support, profitability, and satisfaction with the franchise system?

What causes for termination are outlined in the franchise agreement, and are any of the 12 listed causes considered unusual or particularly advantageous to the franchisor?

How does the franchisor define 'breach' and what is the typical cure period or notice given before termination for various violations?