Rita's Italian Ice

The royalty rate of 6.5% exceeds typical QSR franchises (5.0-6.0%). What specific benefits or services justify this higher rate compared to comparable quick service restaurant franchises?

The transfer fee of $17,500 is above the typical range. Can you explain the rationale for this fee and whether it covers franchisor review, approval process, and transition services?

You initiated 2 litigation cases within 3 years (above the typical 0.0-1.0 range). Can you describe the nature of these cases and their outcomes, and whether they relate to franchisee compliance or other issues?

The termination rate of 1.8% exceeds the typical range of 0.0-1.03%. What are the primary reasons franchisees are being terminated, and how do these compare to the industry average?

The transfer rate of 8.1% is above typical (0.0-7.03%), with 46 transfers in 2025 alone. Why is the transfer rate so high? Are these primarily sales to new owners or transfers to family members?

Median gross sales of $342,175 are roughly 58% below the typical QSR range. What factors contribute to this lower revenue, and how do profitability levels compare to other franchises in your system?

Units closed spiked from 1-3 annually in 2023-2024 to 12 in 2025. What caused this sudden increase in closures? Are these franchisor-initiated, voluntary, or due to external market factors?

The franchise agreement requires personal guarantees from franchisees and spouses with joint and several liability. How has this clause affected franchisee recruitment, and are there circumstances where it can be waived?

The operational control clause requires purchases from franchisor-designated suppliers. Can franchisees negotiate better pricing, and what percentage of operating costs are typically locked into these supplier agreements?

Your Item 19 data shows gross sales but does not specify profitability metrics. What are the average unit volumes (AUV) and typical profit margins for established locations in the system?

The non-compete clause is 2 years and 5 miles. How is this enforced if a franchisee exits, and has the franchisor sought damages against departing franchisees who violated this provision?

The renewal conditions include execution of a general release. What does this release typically require franchisees to relinquish, and are there negotiable terms?

The renewal fee of $17,500 equals the transfer fee. If a franchisee renews after 10 years, must they pay this renewal fee in addition to executing a new agreement?

What is your remediation track record for franchisees in violation? Do you consistently offer cure periods, or have you terminated units without providing the stated 7 or 30-day cure windows?

Territory is protected but not exclusive. How frequently do you authorize new units within 5 miles of existing locations, and what protections exist against cannibalization?

2 of the past 4 years showed double-digit unit growth in transfers (36-46 units). Does the franchisor prefer transfers to new unit openings, and does this affect long-term system growth?

The termination rate has remained steady at 8-10 units annually despite net system growth. Are these terminations due to non-payment, operational failures, or other contract violations?

Does the franchisor maintain financial performance data beyond gross sales (e.g., food costs, labor, rent, utilities) that would help franchisees understand profitability at different volumes?