Pelican's SnoBalls

The royalty rate of 8.0% is above the typical 5.0-6.0% range for similar food and beverage franchises. What justifies this higher rate, and are there volume discounts available at higher revenue levels?

Gross sales averages ($171,413) are significantly lower than the typical range for this category ($468,131-$989,787). Are these figures representative of mature units, and what sales performance should a new franchisee expect in year 1, 2, and 3?

The transfer rate of 11.0% is nearly double the typical range of 0.0-6.05%. What is driving the high frequency of ownership transfers, and does the franchisor have concerns about this trend?

Can you provide details on the 1 litigation case initiated against the franchisor over the past 3 years, including the nature of the dispute and its resolution?

The initial term of 15 years with two 15-year renewal options creates a 45-year total potential term, well above the typical 15-20 year range. What is the rationale for this extended commitment period?

Territory is non-exclusive with no encroachment protection. How does the franchisor define territory boundaries, and can the franchisor open competing units near an existing franchisee location?

The renewal conditions list 10 items that must be satisfied. Can you provide specific details on each renewal condition, particularly any that might require facility upgrades or capital investment?

What specific circumstances constitute the 13 non-curable defaults that result in immediate termination without a cure period?

With a termination rate of 1.0% (above the typical 0.0-0.6%), can you identify the primary reasons franchisees have been terminated and provide examples from the past 3 years?

The franchise fee ($32,000) and renewal fee ($32,000) are equal. Does the renewal fee include any updates to systems, training, or equipment, or is it primarily an administrative fee?

Personal guarantees are required from all shareholders and members. Does this apply to all levels of ownership, and are there any circumstances where personal guarantees can be released?

Can the franchisor unilaterally set maximum and minimum pricing for products and supplies purchased from approved vendors? How often has pricing been adjusted in the past 3 years?

The 2-year non-compete is limited to a 10-mile radius. How does the franchisor define the geographic boundaries for enforcement, and are enforcement actions common?

Of the 23 unit transfers in 2024, how many were driven by franchisee dissatisfaction versus normal ownership transitions? What exit interviews or feedback does the franchisor collect?

The system experienced 5 units that 'ceased other' in 2023. What does this category mean, and can you clarify whether these represent closures, acquisitions, or conversions?

What percentage of units are currently profitable, and what is the average payback period for a new franchisee investment?

Are there any master franchise or area development agreements available, and if so, what are the different economics or terms compared to single-unit franchises?

The franchisor requires approval of all suppliers. How many approved suppliers are available for the key categories (ingredients, equipment, packaging), and what is the competitive pricing environment?

Has the franchisor ever declined to renew a franchise agreement, and if so, for what reasons? How many non-renewals occurred in the past 3 years?

Given the non-exclusive territory and absence of encroachment protections, how many franchisees currently operate multiple units, and what percentage of system revenue comes from multi-unit operators?