The franchise fee of $49,000 is notably higher than the typical range of $30,000-$40,000 for similar franchises. What specific services, inventory, or support justify this premium pricing?
#1
Your transfer fee of $20,000 is significantly above the typical range of $7,500-$17,500. Can you explain the rationale and whether this fee applies to internal transfers or only external third-party transfers?
#2
The agreement includes 22 non-curable defaults versus only 2 curable defaults. Can you provide the specific list of non-curable defaults and explain when a franchisee would have no opportunity to correct a breach?
#3
With the 5-day cure period for monetary defaults, what happens if a franchisee disputes the amount owed? Is there a formal dispute process before termination can proceed?
#4
The system experienced 400% unit growth in 1 year (from 1 to 5 units). What are your growth projections for the next 2-3 years, and how do you plan to support this expansion?
#5
All 5 current units report no exits in the past 2 years. Can you provide contact information for franchisees in the system so I can speak directly with them about their experience?
#6
The non-compete clause restricts 'restaurants deriving more than 20% of gross receipts from specialty mac and cheese.' How is this percentage calculated and monitored after franchise exit?
#7
Your agreement requires mandatory binding arbitration on an individual basis only, waiving jury trial and class action rights. Have any disputes arisen in the system, and what was the resolution process?
#8
The renewal conditions require payment of a $20,000 successor agreement fee plus 'mandatory remodeling, repairs, and redecoration as determined by franchisor.' What is the typical cost range for these mandatory improvements at renewal?
#9
You require personal guarantees from all equity owners and their spouses. In the event of franchise failure, what collection efforts does the franchisor typically pursue against personal guarantees?
#10
The agreement mandates purchases from franchisor-designated suppliers across 8 categories. What is the markup or volume discount structure, and can franchisees request alternative suppliers with franchisor approval?
#11
The franchisor can set 'advertised and maximum prices for system services and products.' How often do you adjust pricing guidance, and how does this impact franchisee profit margins?
#12
Item 19 shows average gross sales of $720,395. What is the median sales figure, and what is the range of unit performance (best and worst performing units)?
#13
How many of the 5 current units have been operating for a full 12-month period, and are the reported $720,395 average sales based on all 5 units or a subset?
#14
Since your system has only existed since 2022, what performance data do you have from pre-franchise testing or company-operated units? How long were these operations running before franchising began?
#15
The territory is marked as 'not exclusive' but includes encroachment protection. What specific restrictions prevent the franchisor or other franchisees from opening within my protected area?
#16
Can you clarify the difference between your 'protected' territory designation and the 'non-exclusive' classification? What scenarios would allow another unit to operate within my territory?
#17
What is included in the initial franchise support and training (Item 7 in the FDD)? Given the small system size, how do you deliver training and ongoing support to franchisees?
#18
Have you received any regulatory inquiries, complaints with the Federal Trade Commission, or state franchise regulators regarding the franchise offering?
#19
What percentage of the current 5 units are owned by existing Roni's employees or corporate insiders versus external franchisees, and how does this affect transparency of performance data?
#20