Given the 20% royalty rate, nearly double the typical 6-10% range for business services franchises, how is this justified relative to franchisor support and services provided compared to competitors?
#1
Can you provide specific examples of the 13 non-curable defaults listed in the termination clause that would result in immediate franchise termination without cure period?
#2
The post-term non-compete of 150 miles is three times broader than typical. What business rationale supports this unusually wide geographic restriction, and are there any geographic exceptions or negotiation possibilities?
#3
With a minimum monthly royalty of $6,000 regardless of revenue and 10% late fees plus 18% annual interest, what revenue thresholds do existing franchisees typically achieve to exceed these minimums and when do most units reach profitability?
#4
Can you explain the two 'ceased other' units in 2021 and the two closure/cessation events—what were the specific reasons these units exited the system?
#5
The transfer rate of 6.7% exceeds typical ranges. Are these voluntary transfers to new franchisees or are they being forced by the franchisor due to performance issues?
#6
How does the $30 monthly technology fee compare to actual technology services provided, and are there additional technology costs not listed in this fee?
#7
Given the requirement for binding arbitration in Miami, Florida with class action waiver, what is the average cost and timeline franchisees face if disputes arise with the franchisor?
#8
The franchise agreement requires purchases from designated or approved suppliers only—can you provide the list of approved suppliers and detail any rebates or commissions the franchisor receives from these supplier relationships?
#9
With an Item 19 provided, what is the range of outcomes for franchisees—specifically, what percentage of units fall below, at, or above the median gross sales of $225,765?
#10
Can you clarify the difference between the 4 renewal conditions mentioned and explain what performance metrics or requirements must be met to qualify for renewal after the initial 10-year term?
#11
The personal guarantee clause covers 'all claims against the franchisor, including those allegedly caused by the franchisor.' Has this indemnification language been tested in litigation, and what claims have personal guarantees covered?
#12
Why does the system show 6 of 15 units (40%) transferring or exiting over the past 3 years, yet the current transfer rate shows only 6.7%—how are these metrics calculated differently?
#13
Given the 1-year non-compete post-termination, can franchisees work in the same industry for competitors within that 1-year window outside the 150-mile radius, or are there broader restrictions?
#14
The support and training score of 70 is below the typical 74-91 range. What specific training and ongoing support does the franchisor provide, and how often are franchisees required to attend training?
#15
With zero litigation cases but a legal risk score of 80 (above typical 60-78), what specific contractual or operational risks does the franchisor identify that account for this elevated risk profile?
#16
The renewal fee is $5,000—is this in addition to the transfer fee, and are there other renewal-related costs such as updated training or system upgrades required at renewal?
#17