The royalty rate of 12.0% is above the typical range of 6.0-8.0% for sports and recreation franchises. What services, support, or technology are included in this higher royalty rate compared to competitors?
#1
The franchise fee of $60,000 exceeds the typical range of $39,500-$55,000. What is included in this higher fee, and are there any itemized breakdowns of how this fee is allocated?
#2
The transfer rate of 9.6% is nearly double the typical range. Can you provide the reasons for the 8 transfers in 2024-2025—were these owner-initiated sales, franchisor-facilitated transfers, or circumstances where franchisees needed to exit?
#3
One unit showed 'ceased other' status in 2023. Can you explain what 'ceased other' means and provide details about this closure?
#4
Your potential contract term of 15 years (10-year initial + 5-year renewal) is shorter than the typical 20 years for your category. Why does your renewal option offer only 1 term instead of multiple options?
#5
What are the specific 8 renewal conditions mentioned in the franchise agreement that franchisees must meet to qualify for the 5-year renewal?
#6
The agreement requires personal guarantees from each owner and spousal consent forms. Can you clarify what specific obligations spouses are acknowledging and whether these are required even for passive investors?
#7
Regarding supplier restrictions: you maintain sole vendors, designated vendors, and preferred vendors. Can you provide a list of mandatory sole vendors and the typical cost impact this has on franchisees compared to using independent suppliers?
#8
The non-compete is 2 years and 20 miles. Can you clarify whether this applies post-termination, post-expiration, and post-transfer, and whether it applies to all franchise concepts you operate or just Shoot 360?
#9
What does the franchisor's 'reservation of rights' allow them to do operationally? Can you provide examples of operational changes that have been implemented using this reserved authority?
#10
With no litigation in your 3-year history, can you confirm whether franchisees have access to an alternative dispute resolution process (mediation or arbitration) before escalating to litigation?
#11
Item 19 financial performance data is included in your FDD. Can you clarify how many franchisees reported data, what the actual range of unit volumes is, and whether there are significant variances by location type or region?
#12
Given the high transfer activity, what is your actual franchisee satisfaction rate and has there been any formal franchisee feedback or survey data collected in the past 2 years?
#13
The territory is exclusive with encroachment protection—can you define what 'encroachment' means and describe any instances where franchisees raised concerns about competitors or new units being placed too close?
#14
Are there any termination notices pending or in process for any current franchisees that might not yet be reflected in historical data?
#15
What support and training are provided during the initial franchise setup, and how often are training updates or refresher sessions provided during the contract term?
#16
The $10,000 renewal fee is required to extend the contract. If a franchisee chooses not to renew after 10 years, what happens to their customer list, goodwill, and business assets?
#17
Can you explain the relationship between the 12.0% royalty, 2.0% ad fund, and $500 technology fee—are these all separate charges or is the technology fee bundled into one of the other fees?
#18