SafeSplash Swim School

What is the nature of the pending litigation case initiated against the franchisor, and what is the expected timeline for resolution?

What specific factors contributed to the dramatic increase in unit closures from 7-8 units annually (2022-2023) to 21 units in 2024?

Can you provide detailed financial performance data and unit profitability metrics for franchisees who closed in 2024 to understand whether closures were due to underperformance or external factors?

Given the 17.6% 1-year turnover rate and 30.0% 3-year turnover rate, what retention strategies is the franchisor implementing to improve system stability?

Why is the royalty rate 6.0% when the typical range for childcare and education franchises is 7.0-8.0%, and does this lower rate reflect recent changes or a competitive positioning strategy?

Can you clarify the renewal conditions that require franchisees to meet 9 specified conditions before renewal? What percentage of franchisees typically fail to meet these conditions?

The franchise fee renewal requires payment of 10% of the then-current initial franchise fee—how has this amount increased over the past 10 years, and what is the projected renewal fee for current franchisees?

All disputes must be resolved through binding arbitration in Colorado—what has been the average cost and duration of arbitration cases for franchisees, and are there any cases currently in arbitration?

The guaranty language requires all shareholders and spouses to assume personal liability—how many personal guaranty disputes have arisen in the past 3 years?

What is the median profitability (net income) for operating units, and how does this compare to franchisees who have exited the system?

Has the franchisor experienced any material changes in support, training, or operational requirements in the past 2 years that might explain the elevated closure rate?

What is the average unit volume for closed franchisees versus continuing franchisees, and were closures concentrated in specific geographic regions?

How many of the 21 units that closed in 2024 were terminated by the franchisor versus voluntarily closed by franchisees?

The territory is protected but not exclusive—how many franchisees have raised concerns about encroachment or competition within their protected territory?

What is the total cost of ownership including all fees over the initial 10-year term, and what break-even timeframe is typical for new franchisees?

Are there any undisclosed or contingent fees beyond the royalty (6.0%), ad fund (2.0%), and technology fee ($400/month) that franchisees should be aware of?

How is the technology fee of $400/month structured, and what services or systems does it cover? Has this fee increased since the franchise was established?

Can you provide references from franchisees who have renewed or attempted to renew, specifically regarding the 9 renewal conditions and whether they are objectively measurable or subjectively applied?

What is the franchisor's policy on providing remedies or buyout assistance to franchisees facing market saturation or territory encroachment issues?