Can you clarify what caused the 2 unit closures in 2023? Were these franchisor terminations, franchisee voluntary exits, or other circumstances, and what was the timeline for recovery?
#1
The bottom quartile sales figure of $12,382 is significantly below typical ranges for fitness franchises. Can you identify which unit(s) generated this figure and explain the circumstances or support being provided?
#2
Why does the 3-year turnover rate (40.0%) exceed the typical range for fitness franchises, given that the 1-year exit rate shows zero terminations, transfers, and closures?
#3
What accounts for the exceptional 66.7% unit growth in the past year after the 2023 contraction? Were all 2 new units organic franchise sales or did some involve unit recovery or transfers?
#4
The median gross sales of $342,292 fall below the typical fitness franchise range. What support or benchmarking data do you provide to franchisees to help them reach or exceed this median?
#5
Can you explain why the franchise agreement specifies only 13 termination causes compared to the typical 15-21 found in other fitness franchises? Does this indicate more lenient enforcement or a simplified termination structure?
#6
How is the non-exclusive territory enforced given that encroachment protection is claimed as a benefit? Can you provide examples of how you prevent company-owned or other franchised Ritual Hot Yoga locations from opening within protected territories?
#7
The non-compete clause covers 2 years and 10 miles from the former studio plus 'any other Ritual Hot Yoga location.' How is this applied in practice, and have any franchisees challenged or negotiated these terms?
#8
What is your protocol for required renovations and modernization mentioned in renewal conditions? Can you provide examples of typical renovation costs and timelines at renewal?
#9
The franchise agreement specifies 30-day cure periods for most defaults but only 10 days for certain defaults in subsections (6), (7), and (8). What specific situations trigger the 10-day cure period, and have any franchisees been terminated under this accelerated timeline?
#10
All claims must be resolved through binding arbitration in Illinois with a single arbitrator. How many disputes (if any) have gone to arbitration in the past 3 years, and what were the outcomes?
#11
You require mandatory purchasing from designated suppliers for 10 categories including inventory, equipment, POS systems, and signage. Can you itemize the supplier categories and provide annual cost estimates or typical supplier pricing?
#12
Personal guarantees are required from all 10%+ owners, and the agreement reserves the right to require spouse guarantees. In practice, what percentage of franchise agreements require spouse guarantees, and what is the franchisor's reasoning for this additional requirement?
#13
Item 19 shows the average gross sales ($561,213) is significantly higher than the median ($342,292). How many units reported financial data, and can you explain why this gap exists?
#14
Given the rapid growth from 3 to 5 units in one year after the 2023 closures, what qualifications or support requirements do new franchisees receive? Are existing franchisees involved in training or support?
#15
Are there any known ongoing disputes, complaints with state franchise regulators, or class action litigation threats that are not reflected in the litigation data provided?
#16
What is your track record for franchisee renewals? Of the original units, how many have renewed or are expected to renew at the end of their 10-year terms?
#17
The renewal fee is $10,000 plus required renovations. Can you provide examples of typical renovation costs and what modernizations have been required in past renewals?
#18
How do you define 'reasonably determined' in the context of required renovations and modernization at renewal, and what recourse do franchisees have if they believe the requirements are excessive?
#19