The technology fee of $450 monthly is above the typical range for QSR franchises. What specific technology systems and services are included in this fee, and is this subject to annual increases?
#1
Your non-compete radius of 25 miles is double the typical range for QSR franchises. How is this distance measured (straight line vs. drive time), and what specific product categories does it restrict beyond acai/pitaya bowls?
#2
With 34.3% unit growth in the last year, what is your customer acquisition cost per location, and how do you ensure market saturation doesn't occur in high-density areas?
#3
The franchise agreement requires exclusive purchasing from designated suppliers in 11 categories. What is the markup differential between franchisor-approved suppliers versus open market alternatives for key items like POS systems and credit card processing?
#4
You require personal guarantees from all owners and their spouses on a joint and several basis. Under what circumstances would you enforce this guarantee against personal assets?
#5
Renewal requires 180 days prior written notice and compliance with 7 renewal conditions. What percentage of franchisees have been denied renewal in the past 3 years, and on what grounds?
#6
The binding arbitration clause requires disputes to be heard in Monmouth County, New Jersey. What are the typical costs and timelines for arbitration compared to standard litigation for QSR franchise disputes?
#7
With zero terminations over the past 3 years, what is your termination policy for health code violations, failure to meet AUV benchmarks, or quality control issues?
#8
Item 19 financial performance data shows median sales of $1,235,948. What percentage of existing units achieve this benchmark, and what is the typical ramp-up period to profitability?
#9
How many of the 290 current units are company-operated versus franchised, and what are the financial performance differences between these unit types?
#10
The transfer fee is $10,000, and transfers are occurring (0.3% rate). What approval conditions apply to transferees, and do you have a right of first refusal before allowing third-party transfers?
#11
General liability insurance is required at an unspecified level. What minimum coverage amounts are mandated, and what additional insurance riders (cyber, equipment breakdown) are required?
#12
With the rapid growth from 163 to 290 units in 3 years, how many units are in their first 2 years of operation, and what is the early-stage failure rate for these newer locations?
#13
Your support and training score of 87 falls below the typical range for QSR franchises. What ongoing training programs are provided annually, and are they included in the $450 monthly technology fee or additional?
#14
The financial performance score of 63 is above the typical range. Does this mean Item 19 data covers more than 50% of the system, and what is the sample size of units included in the median sales calculation?
#15
Post-term non-compete restricts competing businesses for 24 months. If a franchisee is terminated for cause, are they still subject to this 2-year 25-mile restriction, and has this ever been litigated?
#16
What are the specific renewal conditions beyond the 180-day notice requirement mentioned in the agreement?
#17
Given zero litigation cases and zero terminations, have there been any informal dispute resolutions, cease-and-desist letters, or settlements that did not result in formal litigation?
#18
The franchise requires exclusive use of franchisor-approved POS and credit card processing systems. What are the monthly costs for these systems, and are there penalties for switching providers at renewal?
#19