What are the specific allegations and claims in the 7 pending litigation cases against the franchisor, and what is the timeline for resolution?
#1
Have any of the current 4 operating units been involved in the pending litigation, and if so, what impact has this had on their operations?
#2
The system has 0 units reported for 2022-2023 and 4 units in 2024. Can you provide details on when each of these 4 units opened and their performance to date?
#3
Given the 25 termination causes in the franchise agreement (well above the typical 15-20 range), which defaults are non-curable, and how does the 24-hour cure period for governmental violations practically work in a restaurant setting?
#4
The renewal conditions require 'no more than 5 default notices' during the initial 10-year term. How are default notices tracked and communicated, and what constitutes a 'default notice'?
#5
What specific renovations are required as a condition of renewal after the initial 10-year term, and what are the estimated costs?
#6
Can you clarify the 'designated or approved suppliers' policy across the 8 different purchase categories? Is there a list of approved suppliers, and can franchisees request approval of alternative suppliers?
#7
Are there any franchisees who have declined renewal or closed units in the current 4-unit system, and if not, how long has each unit been operating?
#8
The personal guarantee covers spouses in some circumstances. Under what specific conditions are spouses required to personally guarantee obligations, and can a spouse be released from the guarantee?
#9
What is the average unit volume (AUV) or sales data for the 4 operating units, and why is Item 19 financial performance data not provided?
#10
How many of the 7 pending litigation cases involve franchisor claims against franchisees versus franchisee claims against the franchisor?
#11
The territory is exclusive with encroachment protection. What specific protections are guaranteed, and has the franchisor ever violated exclusivity or approved competing units in existing territories?
#12
What operational support and training does the franchisor provide given the 100/100 Support & Training score, and are these services included in the 6% royalty or charged separately?
#13
Can you explain why the Territory score is 100/100 (above the typical 50-75 range)? What specific factors contributed to this exceptional score?
#14
Are there performance-based termination triggers in the agreement beyond the listed 25 causes, such as minimum sales thresholds or customer satisfaction metrics?
#15
The franchise agreement requires exclusive purchasing from franchisor-designated suppliers. Does the franchisor profit from supplier relationships, and are supplier prices competitive with market rates?
#16
Given 7 pending cases and zero current unit exits, are franchisees aware of the litigation, and has it affected interest in franchise opportunities?
#17
What happens to the exclusive territory if a franchisee defaults on rent, supplier payments, or other obligations outside of the 25 listed termination causes?
#18
The renewal fee is $7,500 for a 10-year renewal. Are there additional fees or conditions beyond this amount, and is the fee negotiable?
#19