The ad fund rate of $100/month is significantly above the typical $1.0-2.5% range for health & beauty franchises. How is this fund used, and what specific marketing initiatives does it support for franchisees?
#1
With a royalty rate of 7.5% above the typical 6.0-7.0% range, how does this compare to competing psychology or wellness franchise systems, and what additional support justifies the higher rate?
#2
Financial Performance data (Item 19) is not provided. Can the franchisor provide Unit Economics or Item 19 disclosure showing average unit volumes, profitability, and operating expenses for existing franchisees?
#3
The system has only 4 units currently. What is the franchisor's growth strategy, and how many units does it project for the next 3-5 years?
#4
Can you provide specific details on the 5 categories of supplier restrictions identified in the Operational Control clause, and what percentage of ongoing costs are tied to franchisor-approved suppliers?
#5
The minimum performance requirement mandates $4,000 per month in royalty payments. How many current franchisees meet this threshold consistently, and what happens if a franchisee falls short?
#6
Given the 18% annual late fee rate (1.5% per month) for overdue payments, can you provide examples of how this has been applied and the dispute resolution process for contested late fees?
#7
The non-compete clause restricts franchisees for 2 years within 25 miles post-termination. Has this been enforced, and are there any cases where the franchisor has pursued legal action against departing franchisees?
#8
Dispute resolution is subject to binding arbitration in Minnesota at the franchisor's sole discretion, with class actions and jury trials waived. Can you explain why Minnesota was selected as the arbitration venue and whether franchisees can negotiate this clause?
#9
Personal guarantees and spouse liability are required for all owners. Are there any circumstances where this requirement could be waived or modified based on franchisee circumstances?
#10
Renewal requires meeting 9 specified conditions. Can you provide the complete list of these conditions and clarify whether they are objective (e.g., sales thresholds) or subjective (e.g., franchisor satisfaction)?
#11
The renewal fee is $10,000 for each 5-year renewal term. What happens if a franchisee does not renew, and are there any terms preventing franchisees from transitioning to non-franchised psychology services in the same territory?
#12
With zero litigation cases in 3 years but only 4 total units, is the sample size sufficient to assess the franchisor's litigation risk? How long has the franchisor been operating, and how many franchisees have departed since inception?
#13
Can you provide the contact information for at least 5-10 current franchisees so I can interview them about their unit economics, actual monthly costs, and their experience with franchisor support and fee compliance?
#14
What is the actual average unit volume for franchisees, and how does it compare to the $4,000/month minimum royalty requirement? What percentage of franchisees have units generating below the minimum threshold?
#15
The Investment Cost score is 88/100 (above the typical 74.0-75.0% range). What is the total initial investment required, and does this include working capital, marketing, licensing, and all startup costs?
#16
Are there any ongoing obligations beyond the royalty, ad fund, and technology fees, such as mandatory training, compliance audits, or equipment upgrades?
#17
The Ongoing Fees score is 59/100 (below the typical 62.0% range). Given the 7.5% royalty plus $100/month ad fund plus $200/month technology fee, how does this compare to your revenue model assumptions?
#18
Can you explain the circumstances under which the franchisor would automatically make franchisees members of an LLC or other entity, and what financial obligations this triggers?
#19