Can the franchisor provide specific details about the 4 closures in 2023, including whether they were voluntary closures or franchisor-initiated, and the stated reasons for exit?
#1
What operational or market challenges led to the sharp decline from 17 to 13 units between 2022 and 2023, and what changes have been implemented to stabilize the system since then?
#2
The franchise fee of $30,000 is 25-35% lower than typical for this category. What is the basis for this lower initial investment, and does it correlate with reduced support or training compared to competitors?
#3
Given the non-exclusive territory policy and lack of encroachment protection, can you provide examples of how the franchisor manages potential conflicts when multiple franchisees operate in overlapping areas?
#4
The technology fee of $95/month is below category typical range. What specific systems and services are included, and are there additional technology costs or platform fees not listed in the agreement?
#5
Can the franchisor clarify the distinction between the 4 units that closed in 2023 and the 4 categorized as 'ceased other'? What does 'ceased other' mean in this context?
#6
The transfer rate of 16.7% significantly exceeds the typical range of 0-6.9%. What is driving the higher frequency of ownership transfers, and how does the $5,000 transfer fee compare to actual costs associated with transfer approval?
#7
The total potential term of 30 years exceeds the typical 20-year maximum for this category. What are the renewal conditions, and are there any fee increases or renegotiation requirements at each 10-year renewal point?
#8
The post-term non-compete clause restricts activity for 2 years within 10 miles of the terminated location AND within 10 miles of any other franchisee location. How is this enforced when franchisee locations are scattered, and what is the geographic scope in practice?
#9
Binding arbitration is required through AAA in the major city nearest the franchisor's principal business address. If the franchisor is located distant from most franchisees, what are the typical costs and logistics for dispute resolution?
#10
The agreement includes 15 non-curable defaults resulting in immediate termination without opportunity to cure. Can the franchisor provide the full list of these 15 defaults, and how have they been applied historically?
#11
Personal guarantees with joint and several liability are required from all owners. Has this been enforced in any past disputes, and what recourse exists if the franchise fails but guarantors dispute personal liability?
#12
Current unit count is 12 with no net growth in the past year. What is the franchisor's growth strategy for the next 3-5 years, and what new unit development targets have been set?
#13
The financial performance data shows median gross sales of $745,781. What percentage of franchisees meet or exceed this sales level, and what is the variance across units?
#14
Can the franchisor provide a breakdown of the 2 transfers in 2024 and explain whether these were voluntary transfers to new owners or forced reassignments?
#15
The System Health score of 35/100 is significantly below the typical 50-75 range. What specific factors contribute to this low score, and what improvements are planned?
#16
Renewal fee is $2,500. At what point in the renewal process is this fee due, and are there any conditions under which the franchisor may decline renewal?
#17
Given the 2-year, 10-mile non-compete and personal guarantees, what happens to a franchisee who exits the system and wants to open a competing business within those restrictions?
#18