Paciugo

The closure rate of 13.6% over the past year is significantly above the typical range for this category. Can you explain what factors have contributed to the recent unit closures, and what support is being provided to remaining franchisees to improve retention?

System units have declined from 25 to 22 over 3 years with negative growth. What is the franchisor's growth strategy, and do you have projections for unit expansion in the next 3-5 years?

The termination rate of 4.5% is substantially above the typical range of 0.0-0.6%. What specific violations or non-compliance issues typically lead to franchise terminations?

The franchise fee is $20,000, which is $10,000-$20,000 below the category average. What is included in this initial fee, and are there any additional startup costs not reflected in this figure?

Technology fees are $0 monthly, which is unusual for this category. What technology systems and support are franchisees expected to use, and how are these systems funded?

The non-compete radius is only 1 mile, well below the typical 5-23.75 mile range. Given this limited protection, how does the franchisor prevent market saturation or internal competition within the same area?

Territory is explicitly non-exclusive with no encroachment protection. How does the franchisor approach placement of new units relative to existing franchisees, and are there any distance minimums between units?

The renewal conditions require signing the then-current franchise agreement form. What types of material changes to franchise terms have been required in past renewals, and how have existing franchisees been affected?

The franchise agreement requires mandatory binding arbitration in the franchisor's principal business offices. How far away is the franchisor's office location, and what would dispute resolution typically cost a franchisee?

Personal guarantees from owners and spouses cover unlimited financial obligations. Has the franchisor ever invoked personal guarantees against franchisees, and what situations would trigger enforcement?

Franchisees must purchase fixtures, furniture, and equipment exclusively from the franchisor or designated suppliers with no approved alternatives. What markup does the franchisor apply to these required purchases, and can you provide a detailed list of all mandatory supplier relationships?

Can you provide a complete breakdown of all unit closures from the past 3 years, including the specific reasons each location ceased operations?

What is the average unit volume (AUV) for operating locations, and has AUV trended upward or downward over the past 3 years?

Item 19 financial performance disclosures are not provided. What specific financial metrics does the franchisor recommend prospective franchisees review, and why is Item 19 not included in the FDD?

System Health is scored at 24, significantly below the typical range. What specific operational or compliance issues does this score reflect?

The renewal fee is noted as 50% of the original franchise fee. Over a 20-year potential term with two renewals, what is the total fee investment expected?

Four legal clauses are noted as heavily franchisor-favorable. Which of these restrictions have been challenged or waived for any existing franchisees, and under what circumstances?

What percentage of current franchisees have been operating for 5+ years, and how many have successfully renewed their agreements?