Given the 1-year exit rate of 1.7% is below the typical range for retail franchises, what specific factors or operational changes has the franchisor attributed to this lower-than-average turnover?
#1
Can you provide a breakdown of the 5 closures in 2024 by reason—how many were voluntary closures versus franchisor terminations, and what were the primary causes cited?
#2
The top quartile sales of $2,028,493 exceed typical ranges for retail franchises. What percentage of franchisees achieve sales above $1.5 million, and what are the key performance differentiators among top-performing units?
#3
With zero litigation cases over 3 years, how does the franchisor handle disputes with franchisees in practice, and are there documented examples of resolved conflicts outside of formal arbitration?
#4
The franchise agreement requires binding arbitration in Minneapolis, Minnesota with class action waiver provisions. How many franchisees have initiated arbitration claims in the past 3 years, and what were the primary issues?
#5
What is the average time between franchise termination notice and final unit closure, and how does the 30-day cure period work in practice for operational defaults?
#6
Can you clarify which of the 9 non-curable default categories have been invoked in terminations over the past 3 years, and provide examples of what constitutes non-curable defaults?
#7
The transfer rate is 4.3% annually. What is the franchisor's approval process for franchise transfers, and what percentage of transfer requests are denied or require conditions?
#8
Personal guarantees from all principal owners and spouses are required. If a franchisee declares personal bankruptcy, how does the franchisor enforce the personal guarantee, and has this occurred?
#9
What specific support or remediation does the franchisor provide to franchisees whose sales fall below the median of $991,890, and at what sales threshold does the franchisor typically counsel exit?
#10
Item 19 financial performance data is provided. Are these audited figures, and do they include franchisees' cost of goods sold, operating expenses, and actual net profit, or only gross sales?
#11
How many franchisees operate multiple units, and does the transfer rate of 4.3% include multi-unit operators consolidating locations or primarily single-unit owners?
#12
The renewal fee is $10,000 and transfer fee is $10,000. Are there any conditions under which these fees are waived, and what percentage of franchisees renew versus exit at the end of their 10-year initial term?
#13
With exclusive territory rights, what is the franchisor's policy on encroachment, and have there been disputes over territory definitions or boundary expansions in the past 3 years?
#14
The system grew from 281 units 3 years ago to 302 units currently. Are new locations primarily franchisee-opened or franchisor-converted company stores, and what is the franchisor's growth strategy?
#15
Can you provide the specific financial reporting requirements for franchisees, including frequency (monthly, quarterly, annual) and consequences for non-compliance or misreported sales figures?
#16
The non-compete clause is 2 years and 10 miles. If a franchisee exits and opens a competing sports retail store within 10 miles after the 2-year period, how has the franchisor handled such situations?
#17
What training and ongoing support does the franchisor provide for inventory management, merchandising, and marketing, and how does this relate to the 2% ad fund contribution?
#18