Can you explain the reasons for the 2 unit closures in 2024 and the 1 cessation? Were these financially underperforming locations or due to franchisee personal circumstances?
#1
The ad fund rate of 3.0% is above the typical range of 1.0-2.0%. How is this fund allocated, and can franchisees see detailed accounting of how their contributions are spent?
#2
Your technology fee of $50/month is significantly lower than the typical $100-479 range. What systems and tools does this cover, and do you plan to increase this fee in the future?
#3
The transfer fee of $29,500 equals your initial franchise fee and is higher than the typical range of $8,333-20,000. What does this fee cover, and is it negotiable?
#4
Your system grew from 26 to 60 units in 3 years (32% CAGR), which far exceeds the typical range. What is driving this rapid expansion, and is it sustainable?
#5
You state territory is non-exclusive with no encroachment protection. What prevents the franchisor from opening a competing Soccer Post location near an existing franchisee?
#6
The non-compete radius of 25 miles exceeds the typical 10-20 mile range. How is this measured and enforced, and what happens if a franchisee relocates within this radius after exit?
#7
What specific conditions must franchisees meet to qualify for the two 5-year renewal options? Are all 8 renewal conditions objective and measurable?
#8
Can you provide details on the one litigation case involving the franchisor as defendant? What was the nature of the claim and outcome?
#9
You have zero terminations over the past 3 years. What grounds for termination exist in the franchise agreement, and how many termination notices have been issued (even if later resolved)?
#10
What financial performance data or Item 19 information can you provide? Without Item 19, how can prospective franchisees assess realistic revenue and profit expectations?
#11
Of the 17 units added in the past year, how many are new openings versus acquisitions of existing independent businesses?
#12
Can you provide the average unit economics (AUE) or median gross sales for franchisees? How do current unit profitability and sales trends compare year-over-year?
#13
The personal guarantee with unlimited joint and several liability extends to franchisees' spouses. Will you consider limiting this guarantee to the franchisee individually or capping liability?
#14
Your agreement requires indemnification of the franchisor for broad categories of claims. What specific incidents have triggered indemnification claims, if any?
#15
The termination clause includes 7 curable and 14 non-curable defaults. Can you provide the full list of non-curable defaults and examples of when each has been enforced?
#16
You require purchasing from approved suppliers in 5 product categories. Which suppliers are approved, and how often does this approved list change? What are the pricing constraints?
#17
The dispute resolution clause waives jury trial rights and class action participation. Is this a required provision, or can it be negotiated?
#18
Are there any ongoing or threatened litigation cases not yet disclosed in public records? Have any franchisees filed complaints with state regulators?
#19
What is your average franchisee tenure, and what percentage of franchisees from 5 years ago are still operating their locations today?
#20