NPM Franchising (EarthWise Pet/GROOMBAR)

Can you explain the increase in unit closures from 7 in 2022 to 15 in both 2023 and 2024? What factors contributed to this acceleration?

Of the 15 closures in 2024, how many were due to franchisee financial failure versus strategic decisions to exit the business?

The system lost 4 net units in the past year despite having 165 current franchises. What is your growth strategy to reverse this negative trend?

Why is the transfer fee $20,000, which exceeds the typical range of $5,750-$15,000 for pet service franchises? What justifies this premium?

Your royalty rate of 5.0% is below the typical 6.0-7.0% range. Does this lower rate reflect competitive positioning, or are there other mandatory fees franchisees should expect?

The franchise agreement allows termination with only 5 days cure for payment defaults. Can you provide specific examples of when this provision has been exercised?

Your non-compete clause covers 30 miles for 2 years post-termination. How is this enforced, and have there been any disputes over this restriction?

The renewal conditions require mandatory refurbishment and eight specific conditions to be met. What is the typical cost of meeting these renewal requirements?

Item 19 shows average gross sales of $545,417, but the median is $482,007—a $63,000 gap. Can you explain this variance and provide the range of unit profitability?

How many of the 15 units closed in 2024 were franchises that had recently renewed or transferred? Does contract history correlate with closure risk?

The minimum performance requirement mandates $1,000 per quarter spending on private label products. How many franchisees fail to meet this requirement annually, and what are the consequences?

Late fees are the greater of $50 or 5% of amounts due, plus 1.5% monthly interest. Can you provide data on how frequently late fees are assessed and collected?

Your Support & Training score is 100 (the highest possible), yet the system shows a 8.9% annual turnover rate. What specific training or support gaps have you identified from exiting franchisees?

The total potential contract term is 10 years, which is below the typical 12.5-20.0 year range for pet franchises. Why is the renewal term also limited to 10 years rather than offering longer-term security?

Encroachment protection is listed as true, but territory is not exclusive. Can you clarify how franchisees are protected from internal competition within their protected territory?

Has the franchisor exercised its right of first refusal on any unit transfers? If so, what was the franchisor's plan for those units?

What percentage of the 2022-2024 closures involved franchisees who had complained about support or system issues prior to exit?

With a System Health score of 39 (below the typical 50-75 range), what specific operational or financial metrics are concerning, and what corrective actions are underway?

Can you provide a breakdown of the 'Ceased Other' category that accounts for 30 units over 3 years—what circumstances classify units in this category?

Are there any pending or anticipated litigation cases not yet filed that franchisees or former franchisees have threatened that we should be aware of?