The franchise fee of $50,000 is significantly higher than the typical $30,000-$40,000 range for this category. What specific value or services justify this premium pricing?
#1
Your transfer fee of $25,000 is substantially above the typical $7,500-$17,500 range. How is this higher fee justified, and are there cases where it has been negotiated or waived?
#2
The contract specifies 23 non-curable defaults that result in immediate termination, but only 5 days to cure monetary defaults. Can you provide examples of these 23 non-curable defaults and clarify which are considered reasonable business violations versus technical breaches?
#3
Your royalty rate of 7.0% is above the typical 5.0-6.0% range for quick-service food franchises. How does this rate compare to your primary competitors, and is it tiered based on unit volume or performance?
#4
The system experienced 50% unit growth in the past year (6 to 9 units). What is your pipeline for franchise development over the next 2-3 years, and what market conditions are driving this expansion?
#5
Average unit volumes of $2.7 million substantially exceed typical F&B franchise sales ($468K-$990K). Are these sales figures verified through Item 19, and do they reflect all units or only mature, well-performing locations?
#6
Your technology fee of $40/month is substantially below the typical $75-$300 range. What specific technology services and support are included at this rate, and are there anticipated increases planned?
#7
The non-compete clause specifies 2 years and 25 miles, with 25 miles exceeding the typical 5-23.75 mile radius. How is the 25-mile radius measured, and has this been enforced against former franchisees in your system?
#8
Your ad fund contribution rate of 1.0% is below the typical 1.5-3.0% range. How is the advertising budget allocated, and what marketing support do franchisees receive relative to their contributions?
#9
The agreement requires purchase of equipment, ingredients, and supplies from designated suppliers in 8 categories. What percentage of unit operating costs are comprised by mandated supplier purchases, and what profit margins does the franchisor realize from supplier relationships?
#10
With zero litigation cases in 3 years and zero unit terminations, how many franchise agreements have been renewed or are approaching renewal, and what percentage of renewals have proceeded without dispute?
#11
Personal guarantees are required from principals and spouses. Are spouses required to provide guarantees even if they are not involved in operations, and under what circumstances have personal guarantees been enforced?
#12
All disputes must be resolved through binding arbitration in Alba with individual arbitration only (no class actions). How many disputes have been arbitrated in the past 3 years, and what were the outcomes?
#13
The renewal fee equals 25% of the then-current franchise fee. If you increase your franchise fee to $60,000, would renewals cost $15,000? How has the renewal fee evolved as you've increased the franchise fee?
#14
What specific encroachment protections exist in your territory agreement beyond the exclusive territory grant, and have any territories been modified or split due to underperformance or franchise requests?
#15
Of the 9 current units, how many are franchisee-owned versus company-operated, and what is the average tenure of your franchisees?
#16
You report zero terminations over 3 years. Has the franchisor ever initiated termination proceedings that were subsequently resolved through settlement, or have all franchise relationships progressed without formal action?
#17
What ongoing training, operational support, and field support are included in your system, given your Support & Training score of 100 (above typical range)? Is this support provided continuously or only during initial onboarding?
#18
The investment cost score of 63 is below typical (75.0). What is the total estimated investment required, including working capital, and what percentage of that is the franchise fee versus equipment, inventory, and real estate costs?
#19
Given the strong sales performance ($2.7M average), what are the reported average unit economics including labor, food costs, rent, and other expenses, and what net profit margins do franchisees typically achieve?
#20