The franchise fee of $75,000 is 35% above the category typical range. What specific services, training, or proprietary systems justify this premium pricing compared to competitors?
#1
Monthly technology fees of $1,480 are 68% above the category typical range. What systems and services are included, and can these fees be modified or negotiated?
#2
Transfer fees of $37,500 are more than double the category typical range. What is the justification for this fee level, and are there circumstances where it may be reduced?
#3
Two litigation cases were initiated against the franchisor in the past 3 years. What were the nature of these cases, and have they been resolved? Are there any ongoing disputes or settlements?
#4
The 1-year exit rate of 5.0% and transfer rate of 25.0% are significantly above typical ranges. Can you provide details on the primary reasons for unit transfers and the demographic characteristics of franchisees who transferred?
#5
Transfer rate jumped to 30 units in 2024, compared to 6-7 in prior years. What drove this 4-5x increase in transfers, and does the franchisor have any concerns about this trend?
#6
What are the specific conditions required to renew the franchise agreement after the initial 10-year term, and what does mandatory remodeling entail in terms of cost and timeline?
#7
The non-compete clause prohibits competitive family recreational businesses within 15 miles for 2 years post-termination. How is 'competitive' defined, and has this clause been enforced against former franchisees?
#8
Median unit sales of $2.18 million significantly exceed category norms. What percentage of franchisees achieve sales within the top and bottom quartiles you report in Item 19?
#9
The agreement requires binding arbitration in Provo, Utah with a 24-month claims statute of limitations. Has any franchisee challenged this provision, and what has been the typical cost of arbitration for disputes?
#10
The franchisor has sole supplier designation for attractions and controls 8 categories of required purchases. What is the annual cost impact of these supplier requirements compared to open-market alternatives?
#11
Personal guarantees are required for owners with 10% or greater interest and their spouses. Are there any scenarios where the franchisor would waive or limit this requirement?
#12
The agreement allows the franchisor to set maximum or minimum advertised prices. How often does the franchisor exercise this control, and what impact has it had on franchisee profitability?
#13
One unit ceased operations for an unspecified reason in 2024 (labeled 'ceased other'). Can you clarify what this category represents and provide details on this closure?
#14
Termination rate of 0.8% exceeds the category typical range of 0.0%. How many franchisees have been terminated since the system's inception, and what were the primary reasons?
#15
With 234 current units, what is your target system size, and what is the timeline for expansion? Are there any markets where you are reducing presence or restructuring?
#16
The agreement specifies 4 curable defaults with cure periods of 10-30 days. How does the franchisor enforce these cure periods in practice, and what happens if a franchisee disputes the franchisor's claim of default?
#17
What percentage of franchisees in your system have renewed their franchise agreement, and what percentage chose not to renew? What were the primary reasons cited for non-renewals?
#18
Are territory boundaries clearly mapped, and does the franchisor have written policies preventing encroachment by other franchisees? How many encroachment disputes have occurred?
#19
Item 19 financial performance data shows strong median sales, but what is the failure rate among new franchisees in their first 3 years, and how does this compare to your most mature locations?
#20