The non-compete radius of 50 miles is notably wider than the typical 25-40 mile range for home services franchises. What is the business rationale for this extended radius, and how does it impact prospective franchisees' ability to operate alternative businesses after exit?
#1
Your Support & Training score of 71 falls below the typical 79.0-90.0 range for this category. What specific training, onboarding, and ongoing support programs are provided to franchisees, and how many hours of training are included in the initial investment?
#2
The system grew from 15 units 3 years ago to 14 units 1 year ago, then back to 15 units currently. Can you explain the closure and termination that occurred in 2023, including the reasons and whether the unit was subsequently refranchised?
#3
With zero litigation cases and zero turnover in the past year, can you provide specific examples of challenges franchisees have faced and how disputes have been resolved informally to maintain this perfect record?
#4
The Risk Factors score of 80 exceeds the typical 58.0-76.0 range, suggesting elevated risk. What specific operational, market, or financial risks does the franchisor identify for new franchisees in this system?
#5
Your Investment score of 79 is above the typical 74.0-75.0 range. Beyond the stated $49,500 franchise fee and $500 technology fee, what are the actual total initial investment costs franchisees should expect, including working capital and startup expenses?
#6
The financial data shows significant variance between median gross sales ($432,293) and average gross sales ($955,157). How many units reported financial data for Item 19, and what explains this substantial difference between median and average performance?
#7
Can you provide the specific breakdown of the 17 categories of non-curable defaults that trigger immediate termination without a cure period, and have any franchisees been terminated under these provisions?
#8
The renewal fee equals 10% of the then-current initial franchise fee. If your franchise fee increases over time, how are renewal negotiations conducted, and can franchisees renegotiate terms before accepting renewal conditions?
#9
Beginning in year two, franchisees pay the greater of 6% of gross sales or a $10,000 minimum annual royalty. How many of your current 15 franchisees pay based on the minimum royalty floor versus gross sales percentage, and what is the average royalty paid?
#10
The mandatory mediation and binding arbitration clause requires disputes to be conducted at the franchisor's principal place of business. What are the typical costs and duration of this process, and can you provide examples of disputes that have gone through arbitration?
#11
With a 2-year post-term non-compete covering any substantially similar products or services, what specific activities or business models would franchisees be prohibited from pursuing, and have there been any enforcement actions?
#12
Your system has exclusive territory protection, but how are territory boundaries defined and documented, and what specific recourse do franchisees have if they believe the franchisor has granted overlapping territories to another franchisee?
#13
Late royalty payments incur 1.5% monthly interest (18% annually). Can you provide the specific payment terms, acceptable payment methods, and the number of franchisees who have incurred late payment interest in the past 3 years?
#14
The termination clause provides only a 30-day cure period for material breaches. Can you provide specific examples of what constitutes a material breach, and has any franchisee successfully cured a breach within this timeframe?
#15
Your Support & Training score is below typical range. Does the franchise provide ongoing field support, mystery shopping, or regular operational reviews, and if so, what is the frequency and cost structure?
#16
The system currently has 15 units with zero pending litigation. What proportion of franchisees are currently within their initial term versus renewal periods, and what renewal rate have you historically achieved?
#17
Can you explain the distinction between the 1 unit closure in 2023 and the 1 unit termination in 2023, and were these two separate events or the same unit reported differently?
#18