Nutrishop

Can you provide detailed summaries of the 3 litigation cases initiated against the franchisor? What were the claims, when were they filed, and what were the outcomes or current status?

Why is the franchise fee significantly lower ($20,000) compared to competing Health & Beauty franchises ($39,500-$54,625)? Does this reflect a newer franchise system or a different business model?

With royalty and ad fund rates at 0%, how does the franchisor generate revenue and fund support services, marketing, and system development?

What explains the spike in unit closures in 2024 (12 closures) compared to 2022-2023 (4-6 closures)? Were there specific market, operational, or system-wide issues?

Of the 12 units that closed in 2024, how many were transferred to new franchisees versus completely exited? What were the primary reasons franchisees cited for closure?

The transfer rate of 11.6% is nearly double the typical range. Are franchisees selling units due to profitability concerns, market saturation, or other factors? How are transfers priced?

With a 5-year initial term versus the typical 10-year term, what is the franchisee commitment and renewal likelihood? Do most franchisees renew after 5 years?

The non-compete clause is 0 years/0 miles. Can franchisees who exit immediately open a competing business in the same market? How does this impact system stability?

What is the actual average unit profitability for existing franchisees? Item 19 is available—what are the median/average gross sales and net profit figures for reporting units?

Can you explain the operational control clause regarding NS Distribution as the sole supplier for promotional items? What markup does NS Distribution apply, and are franchisees required to purchase through this supplier?

The franchisor is defending 3 litigation cases. What is the nature of these disputes—are they related to franchisee performance issues, supplier disputes, regulatory compliance, or other areas?

With 3 renewal conditions (below the typical 6-9 range), what are the specific requirements for renewal? How easily can franchisees renew, and are there performance thresholds?

Why does the system have only 11 termination causes in the franchise agreement compared to the typical 15-21? What grounds does the franchisor have to terminate for non-compliance?

The binding arbitration clause requires disputes to be resolved in Henderson, Nevada, with no class-action rights. Have arbitration proceedings been used in the existing litigation cases, and what costs did franchisees incur?

Personal guarantee requirements make owners jointly and severally liable for all franchise agreement breaches. Can you provide examples of what specific breaches have triggered personal liability in past disputes?

How is the $10,000 transfer fee applied? Is it deducted from the new franchisee's franchise fee, or is it an additional cost to facilitate ownership transfers?

Given the system has no renewal fee and declining unit count, is the franchisor concerned about retention? What strategies are being implemented to improve franchisee satisfaction and renewal rates?

What training, ongoing support, and marketing assistance do franchisees receive given the 0% royalty and ad fund structure? How is this funded differently than competing franchises?

In 2023-2024, how many of the 13 transfers were to existing franchisees expanding vs. external third parties? This indicates whether the system is consolidating or growing.