Can you provide a detailed breakdown of the single litigation case filed by the franchisor in the past 3 years—what was the nature of the dispute, outcome, and how was it resolved?
#1
The monthly technology fee of $1,204 is significantly above industry norms for hospitality franchises. What specific systems and services does this fee cover, and has this fee amount increased since the franchise agreement was executed?
#2
What is included in the $42,000 renewal fee, and are there any additional charges or renegotiation of terms upon renewal after the 20-year initial term?
#3
Why does the franchise require a 2-year non-compete period when the typical range for this franchise category is 0 years? How is geographic scope defined for enforcement?
#4
Can you explain the rationale for a 20-year renewal term when most hospitality franchises offer 5-10 year renewal periods? Are renewal terms negotiable?
#5
Of the 9 transfers in the past 3 years (2022-2024), how many were approved by the franchisor, and were any denied? What are the franchisor's criteria for approving unit transfers?
#6
The royalty rate of 4.75% is below the typical 5.0-5.5% range. Is this rate guaranteed to remain fixed, or could it increase upon renewal?
#7
What specific support and training services are provided that resulted in the Support & Training score of 89? How do these compare to other hospitality franchises?
#8
The Contract Terms score of 60 falls below typical range. Can you identify which specific contract terms differ unfavorably from industry standards?
#9
Regarding the 15 non-curable defaults that permit immediate termination, can you provide the complete list and explain what actions trigger immediate termination without a cure period?
#10
How are personal guarantees enforced if a franchise unit underperforms? Have any franchisees been required to pay under their personal guarantees in the past 3 years?
#11
What happens to the exclusive territory protection if a unit closes or transfers? Can the franchisor add new units to that territory?
#12
Item 19 financial performance data is provided. What is the median or average unit volume (AUV) for comparable units, and are there significant performance variations by location or market type?
#13
Of the 2 units that closed in 2023 and 2024, what were the stated reasons, and were there any disputes with the franchisor prior to closure?
#14
The binding arbitration clause requires all disputes to be resolved through AAA arbitration with non-appealable awards. Have any arbitration disputes been filed in the past 3 years, and what were the outcomes?
#15
The Investment Cost score is 0/100, which is unusually low. Does this indicate missing or incomplete investment cost disclosure, or are there significant undisclosed costs beyond the initial $40,000 franchise fee?
#16
Can you clarify the encroachment protection policy—what specific distance or criteria does the franchisor use to determine if a new unit encroaches on an existing franchisee's territory?
#17
Are there circumstances under which the franchisor can terminate the agreement before the 20-year term expires, and if so, what are the buyout or severance obligations to the franchisee?
#18