Mainstream Boutique

The franchisor initiated 1 lawsuit in the past 3 years—can you provide details on the nature of this case, the outcome, and whether it involved a franchisee dispute?

Your termination rate of 4.2% is nearly double the typical range for retail franchises (0.0-2.28%)—how many franchisees were terminated for cause versus non-renewal in the past year, and what were the primary reasons?

With a transfer rate of 9.7% (more than double the typical 0.9-4.43%), what percentage of franchisee transfers occur due to franchisor approval denial versus successful owner changes?

Bottom quartile sales performance is $223,537, which is significantly below the typical minimum of $250,076 for your category—what percentage of your current franchise units fall below $250,000 in annual sales?

Your 3-year turnover rate of 25.0% substantially exceeds the typical range of 5.33-17.68%—can you break down which specific markets or unit demographics are driving these exits?

The system contracted from 76 to 67 units over 3 years despite presumably opening new units—how many new franchises were opened during this period, and what was the main driver of the net decline?

Your royalty rate of 7.5% exceeds the typical range of 4.38-6.0%—are there any volume discounts, performance incentives, or graduated rates that reduce royalties based on unit sales?

The technology fee of $500 monthly is at the high end of the range—what specific services and software are included, and are franchisees required to contract with third-party providers?

Your non-compete radius of 25 miles is broader than the typical 10.0-20.0 miles—how is this enforced, and are there any documented cases where franchisees have been sued for violating this provision?

Support & Training scores 73/100, significantly below the typical 84.0-99.0 for retail franchises—what specific training and ongoing support are provided to franchisees, and how frequently?

The franchise agreement requires binding arbitration exclusively in Minneapolis, Minnesota—have any franchisees requested arbitration hearings, and what was the typical cost and timeline for dispute resolution?

Minimum performance requirements mandate meeting certain continuing fees regardless of sales—what specific sales or performance thresholds must franchisees meet, and what happens if they fall short?

Late payments incur an $50 service charge plus 18% annual interest—how frequently are late payments assessed, and are there any grace periods or alternatives for franchisees experiencing temporary cash flow issues?

The franchisor maintains supplier restrictions across 5 categories and requires purchases from the Approved Vendor List—can you provide the vendor list and detail any pricing controls or markups the franchisor retains?

Personal guarantees are required from all individual owners with spouses bound by non-compete provisions—are there any circumstances where personal guarantees can be released, and how are spouse non-competes enforced?

With 12 termination causes in the franchise agreement (below the typical 14.0-19.25), what specific performance or conduct issues trigger termination, and is remediation possible?

Can you provide a list of all franchisee closures and terminations from the past 3 years with the primary reasons (financial distress, franchisor termination, voluntary sale, etc.)?

Item 19 financial performance data is available—what percentage of franchisees meet or exceed the average gross sales figures, and what is the variance between top and bottom performers?

The renewal fee is $5,000—is this the only renewal cost, or are there additional expenses required to renew a franchise at the end of the 10-year initial term?

Given the negative unit growth rate of -6.94% in the past year, what is the franchisor's strategic plan to stabilize and grow the system, and are there any new markets or product lines being developed?