The technology fee of $650/month is above the typical range for business services franchises. What specific services and tools does this fee cover, and is it subject to increases during the contract term?
#1
Your system grew 50% in the past year (from 4 to 6 units). What is driving this growth, and do you have specific unit growth targets or projections for the next 3-5 years?
#2
The initial contract term is only 7 years with a total potential term of 7 years, which is shorter than typical for this category. Why was this term length selected, and what are the conditions for renewal?
#3
The renewal fee equals 10% of the then-current initial franchise fee. If the initial franchise fee increases in future years, how might this affect renewal costs for existing franchisees?
#4
What are the 8 specified conditions franchisees must meet to qualify for renewal after 7 years?
#5
With zero reported cases in 3 years, can you describe any disputes, complaints, or challenges you have had with franchisees that did not result in formal litigation?
#6
The transfer fee of $5,000 is substantially lower than typical ($5,250-$19,500). Are there additional approval fees, training fees, or other charges associated with unit transfers?
#7
All disputes are subject to binding individual arbitration rather than class action. Has this dispute resolution mechanism been tested, and if so, what types of disputes have been arbitrated?
#8
Personal guarantees and spousal signatures are required for all owners. Are there any circumstances under which the franchisor might waive personal guarantee requirements for certain investors?
#9
What was the basis for adding 2 units in 2024? Were these conversions of independent operators, organic growth from existing franchisees, or new franchise sales?
#10
The non-compete clause applies for 2 years within 25 miles and in any zip code operated within the past 2 years. If a franchisee's territory spans multiple states, how does the non-compete restriction apply geographically?
#11
Item 19 financial performance data is available. What percentage of franchisees achieve the average or median gross sales figures, and what is the typical timeframe to reach profitability?
#12
The franchisor can terminate with as little as 10 days' notice for certain defaults. What are the 16 non-curable defaults that trigger immediate termination rights?
#13
How many franchisees are currently operating in the system, and of the 6 current units, how long has each been operating (original opening dates)?
#14
Are there any pending franchise applications or signed franchise agreements for new units that would expand the system beyond 6 units?
#15
The termination rate is 0.0%. Has the franchisor ever terminated a franchise agreement, or has every exit been voluntary or due to natural business reasons?
#16
What training and ongoing support are included in the 7-year term, and what additional fees may apply for training, technology updates, or other support services?
#17
The transfer fee of $5,000 seems low compared to other franchisors. Does this fee cover training and approval of the new franchisee, or are there separate charges for these services?
#18