The franchise currently has 0 operating units. What is the timeline and plan for unit development, and how does this affect your obligations as a franchisee?
#1
All 7 pending litigation cases name the franchisor as defendant. What are the specific claims in these cases, and how might unfavorable outcomes impact franchisee operations or obligations?
#2
What is the franchisor's position on each of the 7 pending litigation matters, and do any of these cases relate to franchise agreement enforcement or franchisee disputes?
#3
The advertising fund rate of 4.0% exceeds the typical range for hospitality franchises. How is this fund used, and can you provide documentation of expenditures and return on investment for franchisees?
#4
Your agreement is non-renewable with no renewal terms or conditions specified. Does this mean at the end of 23 years, you have no option to continue operating under the Hilton brand, or are renewal terms negotiable?
#5
The transfer fee of $100,000 is at the high end for this category. Under what circumstances can you transfer your franchise, and are there any restrictions or conditions beyond the transfer fee?
#6
How does the $100,000 transfer fee apply if the franchisor terminates your agreement? Is it refundable or creditable if termination is franchisor-initiated?
#7
Given the 10-day cure period for payment defaults, what specific payment obligations trigger this clause, and are late technology fees ($600) subject to immediate non-curable default status?
#8
The agreement specifies 16 non-curable defaults allowing immediate termination. Can you provide a detailed list of these non-curable defaults so you understand your risks?
#9
Personal guarantees are required from guarantors. What are the exact obligations assumed by guarantors, and are they personally liable for all franchisee debts or only specific obligations?
#10
The indemnification clause requires franchisees to hold harmless the franchisor. What claims or losses are covered by this indemnification, and does it include franchisor negligence?
#11
The franchise agreement contains no territory protection and no non-compete clause. How does the franchisor prevent another franchisee or company-owned property from operating within your market?
#12
Are there any disputes between the franchisor and current or former franchisees related to the pending litigation cases, and if so, what are the substantive issues?
#13
What support and training does the franchisor provide given the Support & Training score of 68, below typical ranges? Can you provide details on initial training length, ongoing support, and staff availability?
#14
Investment costs score at 26/100, significantly below typical ranges. What are the actual capital requirements to open a unit, including construction, furniture, fixtures, equipment, and working capital?
#15
How many franchisees currently operate under this brand, and what has been their experience in the hospitality market under the Outset Collection by Hilton concept?
#16
Given the high transfer fee and non-renewable agreement, what are your actual exit options if you want to leave the franchise before the 23-year term ends?
#17
Are there any conditions in the agreement that allow the franchisor to unilaterally modify franchise obligations, fees, or operational requirements during the 23-year term?
#18