What specific factors contributed to the spike in closures in 2024 (14 closed units), and how does management plan to address the underlying causes?
#1
The 1-year turnover rate of 9.4% exceeds typical retail franchise ranges—what is driving unit exits, and are most closures franchisee-initiated or franchisor-initiated?
#2
Why does the franchise charge no advertising fund (0.0%) when the typical range for retail franchises is 1.0-2.0%? How is national marketing funded?
#3
The non-compete clause specifies 100 miles, which is significantly broader than typical retail franchise restrictions (10-20 miles). What is the business rationale for this extended geographic restriction?
#4
With 21 termination causes listed in the agreement versus a typical range of 14-19, which additional causes are included, and how frequently are they invoked?
#5
Can you provide specific examples or case studies of franchisees who have successfully operated units at or near the median gross sales of $635,598?
#6
The franchise agreement requires binding arbitration exclusively in Salt Lake City, Utah. What is the typical cost and timeline for dispute resolution under this process?
#7
Personal guarantees are required from all owners with 5% or greater interest and their spouses. Are there any circumstances under which this requirement can be waived or limited?
#8
What support and training does the franchisor provide, given that the Support & Training score of 78 falls below the typical range of 84-99 for retail franchises?
#9
The transfer fee of $5,000 is notably lower than typical ($8,333-$20,000). Are there any conditions or restrictions that could result in a higher transfer fee?
#10
In the past year, 4 units were transferred to new owners. What was the franchisor's approval process, and were any transfer requests denied?
#11
How many of the 11 closures in 2022 and 14 closures in 2024 were due to voluntary franchisee decisions versus franchisor-initiated actions or market conditions?
#12
Does the 3-year, 100-mile non-compete survive termination for any reason, or only for cause terminations?
#13
The contract allows 9 curable defaults with cure periods as short as 72 hours for public safety violations. What specific acts trigger this 72-hour cure period, and who determines compliance?
#14
What has been the average tenure of franchisees who have exited the system in the past 3 years—are units typically failing within the first few years or later in the relationship?
#15
The renewal fee is listed as $0. Are there any costs associated with renewing a franchise agreement beyond the continued royalty rate?
#16
The 10-year initial term is standard, but with only 1 renewal option of 5 years, what happens to franchisees who wish to continue beyond 15 years total?
#17
Given that the system has declined from 144 units (3 years ago) to 149 units (current), what is management's unit growth strategy for the next 3-5 years?
#18
The contract score of 55 falls below the typical range (60-65). Which specific contract provisions are less favorable to franchisees compared to other retail franchises?
#19
Are there any pending litigation cases or settlement discussions not reflected in the current 0 case count that franchisees should be aware of?
#20