The monthly technology fee of $2,000 is approximately 4-20 times higher than typical for this franchise category. What specific technology services and support does this fee cover, and how is it justified relative to competitors?
#1
The transfer fee of $35,000 is nearly double the typical range for business services franchises. What does this fee include, and is it negotiable or fixed?
#2
Your initial contract term is 35 years with a total potential term of 50 years—substantially longer than the typical 5-10 year initial term. What is the rationale for such an extended initial commitment, and what happens if market conditions change significantly during this period?
#3
The non-compete restriction is limited to 2 years and 5 miles, which is narrower than typical (typically 10-50 miles). How does this limited restriction protect the franchisor and other franchisees from direct competition?
#4
Territory is protected but not exclusive. Can the franchisor open competing Office Evolution locations within my protected territory or nearby, and under what circumstances?
#5
Can you provide specific examples of the 4 terminations that occurred in 2023 and 2024? What were the primary reasons for franchisor-initiated terminations?
#6
The ad fund rate of 3.0% is above typical. How are these funds allocated, and can franchisees see detailed accounting of ad fund spending quarterly or annually?
#7
You require franchisees to purchase from 6 approved supplier categories. Can you provide the complete list of approved suppliers and explain how pricing and product selection are determined?
#8
Personal guarantees are required from all owners covering all losses, expenses, liability, taxes, and damages. Are there any circumstances where this personal guarantee could be limited or capped?
#9
The franchisor maintains operational control over 6 product/supply categories. Can the franchisor change suppliers or pricing terms unilaterally, and if so, what notice period applies?
#10
With zero litigation cases in your history, has the franchisor engaged in any disputes that were resolved outside of court, arbitration, or mediation proceedings?
#11
The system currently has 84 units compared to 73 three years ago. What percentage of this growth came from new franchisees versus acquisitions or conversions of existing businesses?
#12
Median gross sales are $580,757. What percentage of franchisees achieve this level, and what is the range (25th to 75th percentile) of actual gross sales?
#13
The renewal fee is $2,500. Are there any restrictions on renewing, or does the franchisor have the right to decline renewal or substantially increase fees upon renewal?
#14
Given the extended 35-year initial term, what is your historical renewal rate, and have franchisees expressed concerns about the length of the commitment or difficulty obtaining financing for such long-term agreements?
#15
You mention approved suppliers for 6 categories—do you receive rebates, volume discounts, or other compensation from these suppliers, and if so, how is this disclosed to franchisees?
#16
What training and ongoing support are provided to justify the $2,000 monthly technology fee, and how does this compare to competitors' offerings?
#17
The non-renewal rate is 0.0%. Does this indicate that all franchisees who complete their initial 35-year term choose to renew, or does it reflect limited historical data on exiting franchisees?
#18
Can you provide the Item 19 financial performance statement showing the number of franchisees reporting, performance by region, and profitability metrics beyond gross sales?
#19