The royalty rate of 8.0% exceeds the typical range of 6.0-7.0% for this franchise category. How does this higher royalty compare to other pest control or home service franchises you've evaluated?
#1
Your technology fee of $60/month is substantially lower than the typical range of $156.50-$599.00. What specific technology services and support does this fee cover, and could fees increase in future years?
#2
Bottom quartile units are reporting $108,907 in gross sales, significantly below the typical range minimum of $128,477. What factors contribute to this variance, and do you have data on the profitability of bottom quartile units after expenses?
#3
The franchise agreement contains 25 non-curable defaults (compared to a typical range of 14-21). Can you provide a detailed list of these 25 defaults and explain which ones are most frequently cited in terminations?
#4
Renewal requires satisfaction of 11 conditions (above the typical 6-9). What are the specific renewal conditions, and how frequently do franchisees fail to meet them during renewal negotiations?
#5
One litigation case was filed against the franchisor in the past 3 years. What was the nature of this case, has it been resolved, and what was the outcome or current status?
#6
Termination rate is 0.0% for the past year, yet 12 units were terminated in 2022. What changed in your termination practices, or were those earlier terminations under different circumstances?
#7
Can you provide the names and contact information for at least 10 current franchisees across different performance tiers, including some with sales below $150,000 and above $500,000?
#8
The franchise agreement mandates arbitration through JAMS and waives jury trial and class action rights. What is your rationale for this dispute resolution approach, and has any franchisee challenged this requirement?
#9
All owners with 5%+ equity must provide joint and several personal guarantees. If a franchisee defaults, can the franchisor pursue personal assets of all guaranteed owners equally, or does it pursue them sequentially?
#10
The franchise agreement allows you to require purchases only from approved vendors or single sources. What percentage of a franchisee's operating costs are subject to mandatory vendor requirements?
#11
The non-compete restricts franchisees for 2 years within 40 miles of their territory and in any zip code where they served customers. How broadly has this been interpreted in practice, and have you enforced it against former franchisees?
#12
Transfer fee is $10,000 and renewal fee is $5,000. Are these fees ever negotiable, particularly for well-performing franchisees, and do you offer any fee reductions for early renewal?
#13
Of the 10 units closed in 2024, how many were closed due to low profitability versus other reasons (owner relocation, health issues, market conditions)? What was the typical time-to-profitability for these failed units?
#14
Item 19 financial performance data is included. Over what time period were these sales figures collected, how many units reported data, and does this data include seasonal adjustments for a pest control business?
#15
The support and training score of 100 significantly exceeds the typical range. What specific training programs, ongoing support, and field assistance are included in the franchise package?
#16
Can you explain the increase in 'ceased other' exits from 0 in 2022 to 7 in 2024? What circumstances fall under this category?
#17
Exclusive territory is provided with encroachment protection. How do you define and enforce territory boundaries, and have any franchisees filed complaints about encroachment by company-owned units or other franchisees?
#18
The investment score of 71 is below the typical range of 74-75. What does your total initial investment include, and what is the typical cost breakdown (equipment, inventory, working capital, training)?
#19
The ongoing fees score of 58 is below the typical range of 62. Beyond the 8% royalty and $60 technology fee, what other ongoing fees or mandatory costs do franchisees incur?
#20