Showhomes

The franchise fee of $19,995 is substantially lower than the typical range of $45,000-$59,900 for this category. What explains this significant difference, and are there any additional upfront costs not reflected in this fee?

Your royalty rate of 10.0% exceeds the typical 6.0-7.0% range. How does this rate structure compare to competitors, and is there flexibility in negotiating this rate?

The system has declined from 31 units to 19 units over 3 years (a -15.06% annual decline). What are the primary reasons for this contraction, and what specific steps is the franchisor taking to stabilize and grow the system?

The 1-year turnover rate of 22.7% is nearly double the typical range. Can you break down the reasons for unit exits in the past 12 months—how many were franchisor-initiated terminations versus franchisee closures?

Nine terminations have occurred over the past 3 years. What are the most common reasons the franchisor has terminated agreements, and what specific performance standards or benchmarks trigger termination?

The non-renewal rate is 9.1%, and renewal requires payment of a $5,000 fee plus remodeling to current standards. How many existing franchisees have opted not to renew, and what are their stated reasons?

Territory is non-exclusive with no encroachment protection. Can the franchisor open additional units or approve new franchisees in your territory, and has this occurred with existing franchisees?

The 2-year/25-mile non-compete applies to 'all other system locations.' How many system locations currently exist within the 25-mile radius of a typical franchise territory, and could this radius expand if the system grows?

Item 19 financial data shows median gross sales of $416,288 and average gross sales of $560,899. How many units contributed to these figures, and what is the range of performance (top 25% vs. bottom 25% of units)?

The franchisor charges a $295 monthly technology fee plus a 2.0% ad fund. What technology services and marketing support are included, and are these costs mandatory or optional?

Personal guarantees from principals and their spouses are required with joint and several liability. Are there any circumstances under which the franchisor would release spouses from personal liability?

Termination events include 18 non-curable defaults that result in immediate termination. Can you provide a complete list of these triggers, and how would a franchisee be notified of potential non-compliance before termination?

The late fee is the greater of $250 or 10% of overdue amounts, with 18% annual interest. Have these penalties been enforced against franchisees, and are there any hardship provisions?

Minimum performance requirements exist as either minimum royalty payments or per-transaction fees. What are these minimums, and what percentage of current franchisees are meeting them?

The franchise agreement requires use of franchisor-specified brands and approved suppliers. Are these suppliers exclusively designated by the franchisor, and what percentage of costs do approved supplier products represent?

Support & Training scores 78, below the typical 79.0-90.0 range. What initial training is provided, how long does it last, and what ongoing support or continued education is available?

System Health scores only 1/100. What specific metrics does this reflect, and what operational or contractual issues is the franchisor aware of?

Risk Factors scores 46/100, below the typical 58.0-76.0 range. What are the primary risks identified in this system, and how does the franchisor plan to mitigate them?

Has the franchisor conducted any audits or inspections of franchisee operations, and what remediation steps are required if deficiencies are found?

Are there any pending disputes or complaints filed with state franchise regulators, even if not reflected in formal litigation data?