Can you provide details on the single litigation case filed against the franchisor in the past 3 years? What was the nature of the dispute and how was it resolved?
#1
Your transfer rate of 6.8% exceeds the typical range for home service franchises. What is driving the higher-than-average number of unit transfers, and what approval process do you require for unit sales?
#2
Your non-compete radius is 20 miles, which is narrower than the typical 25-40 mile range for this category. Why did you choose a more limited geographic restriction, and has this created enforcement challenges?
#3
You list only 12 termination causes in your franchise agreement, compared to the typical 14-21. Which common termination triggers are excluded, and how do you handle franchisees who breach the agreement in ways not explicitly listed?
#4
Your system grew 32.1% in the past year, substantially exceeding the typical 28.6% growth rate. Is this growth rate sustainable, and what capacity does your support team have to maintain the enhanced support scores (93/100) with this expansion?
#5
Your Ongoing Fees score is 60, below the typical 62.0 for home services. Can you clarify all ongoing costs beyond the stated 7% royalty, 2% ad fund, and $450 technology fee (e.g., insurance requirements, mandatory training, software subscriptions)?
#6
How many franchisees were involved in the 2022 exit events (9 units ceased operation or transferred)? Were any of those exits related to market conditions, support issues, or franchisee business challenges?
#7
The franchise agreement requires mandatory binding arbitration in Texas with class action waivers. If a franchisee is located outside Texas, how are arbitration costs and travel logistics typically handled?
#8
You require personal guarantees from all owner-spouses and their spouses per the renewal conditions. Can you explain the rationale for requiring spousal guarantees, and are there any circumstances where this requirement can be waived?
#9
Your renewal conditions require 'mandatory refurbishment of the business as determined by franchisor.' What is the typical cost and timeline for refurbishment, and what happens if a franchisee cannot afford or complete the refurbishment by renewal time?
#10
The agreement specifies 8 non-curable defaults and 13 curable defaults with cure periods as short as 3 days for payment defaults. Are payment defaults the primary reason for terminations in your system, and what support do you provide to help franchisees avoid these breaches?
#11
Can you provide a breakdown of the 2 'ceased other' units in 2022 and 2023? What circumstances led to those exits, and are they classified differently from closures or terminations?
#12
Your termination clause allows franchisor termination for non-payment defaults within 3 days (72 hours). How is notice delivered, and what is your actual practice for defaulting franchisees—do you typically terminate or work toward resolution?
#13
Regarding territory exclusivity and encroachment protection, has any franchisee ever challenged your territory decisions or claimed encroachment by another franchisee? If so, how were those disputes resolved?
#14
Your operational control clause requires use of only franchisor-designated or approved products and suppliers, and allows franchisor to set minimum and maximum pricing. Can you provide examples of product restrictions and typical price ranges set for different service types?
#15
The agreement includes indemnification requirements. Have you ever required a franchisee to indemnify you, and what was the typical cost impact on that franchisee?
#16
Your Support & Training score is 93/100, above the typical 79-90 range. Can you detail the support provided post-opening, including frequency of field visits, training updates, and systems/software support included in the technology fee?
#17
With 1 litigation case in 3 years, can you disclose whether that case involved a franchisee dispute, an employee claim, a customer injury claim, or another type of plaintiff? Has it been resolved or is settlement/judgment pending?
#18
The franchise agreement requires mediation before binding arbitration in Texas. If mediation fails, what are the estimated costs for arbitration, and who bears those costs in a dispute?
#19
Can you provide the names and contact information for at least 10 current franchisees and 5 former franchisees (including those who transferred or closed) so I can conduct independent reference checks?
#20