The Franchise Fee of $30,000 is approximately 25% lower than the typical range of $35,000–$40,000 for similar fast casual restaurants. What accounts for this below-range pricing, and are there any plans to adjust this fee in future franchise offerings?
#1
The Ad Fund Rate of 1.0% is significantly below the typical range of 1.5–3.0%. How does the franchisor allocate marketing resources, and what marketing support should franchisees expect at this lower contribution level?
#2
Your Termination Rate of 2.4% exceeds the typical range of 0.0–1.1% for this category. Of the 1 termination in 2024, what were the specific grounds, and what operational or financial issues did that unit face?
#3
What were the circumstances of the 1 unit closure in 2024? Was it voluntary closure, franchisor-initiated termination, or another reason?
#4
The Transfer Rate is 0.0% despite an available transfer fee of $15,000. Why have no franchisees transferred their units, and what barriers or restrictions exist for unit transfers?
#5
Your franchise agreement specifies 8 curable defaults (5–60 day cure periods) and 15 non-curable defaults. Can you provide examples of the 15 non-curable defaults, particularly those most likely to affect franchisees?
#6
The non-compete clause restricts activity within a 10-mile radius for 2 years and covers any restaurant where 30% or more of the menu is Middle Eastern or Mediterranean. How strictly is this defined, and what happens if a franchisee wants to operate a different concept within the radius after exit?
#7
All disputes must be resolved through binding arbitration in Chicago, Illinois, with waiver of jury trial rights. What is the average cost and timeline for arbitration cases involving franchisees, and are there any documented examples?
#8
The renewal conditions require payment of a renewal fee equal to 50% of the then-current initial franchise fee and mandate restaurant remodels and upgrades. What is the estimated cost of these remodels, and are they a condition of renewal or negotiable?
#9
Can you clarify which 8 product categories must be purchased exclusively from designated or approved suppliers, and what is the typical markup or pricing structure on these products compared to open-market alternatives?
#10
How many franchisees have renewed their agreements since NAF NAF began franchising, and what percentage of franchisees who reached the end of their initial 10-year term chose to renew versus exit?
#11
The data shows the system grew from 38 units (3 years ago) to 41 units (current). What is the breakdown of these 3 new units—are they all new openings, or do some represent transfers of existing locations?
#12
Item 19 reports Median Gross Sales of $1,070,947 and Average Gross Sales of $1,036,912. What percentage of franchisees are currently meeting or exceeding these figures, and what is the range of gross sales across the system?
#13
How is the personal guarantee enforced in the franchise agreement, and are there documented cases where franchisors have pursued personal guarantees against former franchisees?
#14
The indemnification clause requires franchisees to indemnify the franchisor for claims arising from restaurant construction, design, or operation. Does this extend to claims resulting from franchisor-mandated design standards or supplier-related issues?
#15
Despite zero litigation cases in 3 years, are there any pending disputes, complaints filed with state regulators, or ongoing negotiations with franchisees that are not yet formalized as legal cases?
#16
What is your policy on territory encroachment? While the agreement states territory is protected and not exclusive, under what circumstances might the franchisor open or approve a competing location within an existing franchisee's territory?
#17
How many franchisees currently operate multiple units, and what are the incentives or requirements for multi-unit development?
#18
The ad fund operates at 1.0% of gross sales. How is this fund allocated between local marketing support to individual franchisees versus system-wide marketing initiatives, and can franchisees request an accounting of fund usage?
#19
What operational support and training does the franchisor provide given the 100/100 support and training score, and are there additional costs or frequency requirements for ongoing training updates?
#20