Rusty Taco

Can you provide details on the 5 units terminated by the franchisor in 2024? What were the primary reasons for termination?

The termination rate of 13.5% is significantly above the typical range of 0.0%-1.1% for fast casual restaurants. What specific operational or contractual issues are leading to these terminations?

Why does the monthly technology fee of $1,000 exceed the typical range by more than double (typical: $200-$500)? What specific technology services and systems does this cover?

The median gross sales of $600,638 are below the typical range. Can you provide Item 19 financial performance data broken down by unit age, location type, and market conditions to help explain this variance?

Given the 13.5% exit rate in the past year, what support or operational changes has the franchisor implemented to improve unit retention and performance?

Can you explain the difference between the 6 units that 'ceased other' in 2022 versus the specific closures, terminations, and transfers documented in subsequent years?

The franchise fee of $30,000 is below typical range. Are there additional startup costs, training fees, or equipment deposits not reflected in this initial franchise fee?

What is included in the $1,000 monthly technology fee? Is this a fixed cost or does it scale with sales or unit volume?

How many units operate profitably versus the median and average gross sales figures provided? Are there units significantly underperforming the median?

The transfer fee of $5,000 is substantially below typical. Are there additional conditions, approval processes, or franchisor costs associated with unit transfers not reflected in this fee?

With a 13.5% termination rate, what are the specific default conditions that most frequently trigger franchisor termination?

Can you provide a breakdown of the 'ceased other' category for the past 3 years? Are these voluntary closures, acquisitions, or other circumstances?

The non-compete clause restricts operation of 'any restaurant or food service business deriving more than 10% revenue from Mexican-inspired food' for 2 years. How is compliance monitored and enforced?

Given that territory is protected but not exclusive, how does the franchisor prevent or manage customer overlap between nearby units?

The renewal fee is the higher of $7,500 or 25% of the then-current franchise fee. Can you provide examples of what renewal fees have been for units renewing in the past 5 years?

What specific encroachment protections are contractually guaranteed beyond the protected territory designation?

Can you identify any operational or market patterns among the 5 units closed in 2024 (location, tenure, performance metrics)?

The Dispute Resolution clause requires binding arbitration in Plano, Texas. Can you provide examples of disputes that have been arbitrated and their outcomes?

How many of the current 37 units are in year 1-5 of operation versus year 6-10? Does unit performance or closure rates vary significantly by tenure?

The operational control clause requires purchasing from franchisor-designated suppliers across 10 categories. Can franchisees negotiate pricing or are margins set by the franchisor?