SBS Franchising, LLC / Stratus Building Solutions

Can you provide detailed information about the 3 litigation cases against the franchisor, including the nature of each claim, parties involved, current status of the pending case, and whether any settlements or judgments have been issued?

The franchise fee of $142,500 is significantly higher than the typical range for cleaning franchises ($30,000-$60,000). What specific value, training, territory rights, or services justify this premium pricing?

Your royalty rate of 3.5% is substantially lower than the typical range of 6.0-8.13%. How does the franchisor ensure profitability and system support with below-market royalties, and are there plans to adjust rates?

The transfer fee of $50,000 is approximately 3-9 times higher than typical transfer fees in this category ($5,500-$15,000). What is included in this transfer fee, and how is it calculated or justified?

Your non-compete radius of 100 miles exceeds the typical range of 21.25-50.0 miles. How does this broader restriction impact franchisee ability to work in adjacent markets or pursue alternative opportunities after exit?

The initial term of 15 years is significantly longer than the typical 5-10 year range. What is the rationale for this extended commitment, and what are the terms for early exit or performance-based adjustments?

With a total potential term of 45 years (initial 15 years plus 2 renewals of 15 years each), what percentage of franchisees have successfully renewed, and what are typical renewal rates at each option point?

The financial performance data shows median gross sales of $2,934,782, significantly above typical cleaning franchise sales. What percentage of franchisees achieve this level of sales, and what is the range from lowest to highest performing units?

Zero terminations and zero non-renewals over 3 years is exceptional compared to typical turnover rates of 1.85-16.2%. Can you explain the factors contributing to this retention, and are there any franchisees that chose not to renew but were counted differently?

Regarding the pending litigation case, what is the nature of the claim, expected timeline for resolution, and potential impact on franchisee operations or obligations?

The personal guarantee requirement in the Master Franchise Agreement obligates all partners, owners, and shareholders. Are there any limitations on this guarantee, and in what circumstances would it be enforced?

The binding arbitration clause prohibits class actions. Has this provision been tested in any of the 3 litigation cases, and are there any known disputes currently in arbitration?

Can you provide a breakdown of the average gross sales figure of $3,309,413 by unit type, territory size, or years in operation to understand which franchisees achieve this level?

What does the 2-year, 100-mile non-compete specifically prohibit, and how is compliance monitored after franchise termination?

Are there any circumstances under which the transfer fee of $50,000 could be waived or reduced, such as transfers to family members, internal transfers, or transfers approved by the franchisor?

The termination clause allows cure periods as short as 24 hours for defaults materially impairing goodwill. What specific actions are considered to materially impair goodwill, and has this provision been used in termination actions?

What was the financial performance and operational history of the 1 unit that transferred in 2023, and why did the franchisee choose to transfer rather than continue operating?

How does the franchisor calculate and enforce the 100-mile non-compete in multi-unit territories, and what prevents franchisors from using this to restrict franchisee business opportunities?

Given the zero renewal fee structure, are there any other costs, mandatory upgrades, or technology investments required upon renewal of the franchise agreement?

Can you explain the relationship between the lower-than-typical royalty rate (3.5%) and the higher-than-typical franchise fee ($142,500)—is this a trade-off strategy, and how does it affect long-term profitability for franchisees?