Molly Tea

Why is the franchise fee set at $50,000 when the typical range for similar food & beverage franchises is $30,000-$40,000?

What justifies the 8.0% royalty rate when comparable franchises typically charge 5.0-6.0%?

Why is the initial franchise term limited to 1 year instead of the typical 7-10 years, and what is the rationale for such a short commitment period?

Can you provide details on the renewal process and conditions? The agreement lists 6 renewal conditions—what are they, and how do they differ from industry standards?

Given that renewal requires mutual consent for indefinite successive 1-year periods, what assurance can you provide that franchisees will be renewed beyond the initial year?

The franchise system has only 4 units, all opened in 2024. What was the growth trajectory prior to 2024, and how many units are projected for the next 3 years?

Are there any pending litigations or disputes with current franchisees that are not yet reflected in the 3-year litigation history?

The agreement requires purchase of 7 product categories from approved suppliers only. How is pricing for these mandated purchases determined, and are there volume discounts available?

Can you provide Item 19 financial performance data (sales, expenses, profits) from existing units to help assess the unit economics?

What is included in the remodeling requirements referenced in renewal conditions, and what is the typical cost to franchisees?

The non-compete is 2 years within 10 miles—how is compliance with this monitored, and what are the consequences for breach?

Personal guarantees are required from all principals jointly and severally. If a franchisee defaults, will the franchisor pursue personal assets of individual owners or spouses?

All disputes must be resolved through mandatory arbitration in New York. What are the typical costs and timelines for arbitration cases, and how frequently has the franchisor pursued disputes?

What specific cure periods apply to different types of breaches? The agreement mentions 5 days for payment defaults and 30 days for other breaches—can you clarify which breaches fall into each category?

Are there any transfer restrictions, and what is the process for transferring a franchise unit if you wish to exit?

With only 4 units in operation, how many of these units are currently profitable, and do you have references from existing franchisees?

What training and ongoing support are provided to franchisees, given the support score of 90/100?

The franchise is very new—how long has the franchisor been operating company-owned locations, and what is their track record?

What happens if the franchisor decides not to renew your franchise after the initial 1-year term, and what notice period is required?

Are there any territorial encroachment protections written into the agreement, and how would disputes about territory be resolved?