Can you provide details on the 9 unit closures that occurred in 2024? How many were owner-initiated versus franchisor-directed, and what were the stated reasons for closure?
#1
What specific performance standards are franchisees required to meet regarding Minimum Monitor or Print Display Requirements, and what is the timeline for compliance?
#2
The closure rate of 16.1% significantly exceeds the typical range for this category. What support or interventions does the franchisor provide to struggling units before closure?
#3
Regarding the 2 litigation cases filed in the past 3 years, can you describe the nature of these disputes and their outcomes or current status?
#4
Why is the total potential franchise term limited to 5 years compared to the typical 10-20 year terms in this category? What circumstances would prevent renewal?
#5
The non-compete clause restricts advertising placement business activities for 2 years within 25 miles post-termination. How is 'similar businesses' defined, and have there been enforcement actions?
#6
Given the System Health score of 18/100, what structural or operational issues have been identified, and what remediation plan is in place?
#7
Can you explain the 18% annual interest rate on late payments? Is this rate negotiable, and how frequently are late payments assessed?
#8
The transfer rate of 7.1% exceeds typical ranges. What are the primary reasons franchisees are transferring units, and what approval criteria does the franchisor apply?
#9
Are there successful unit examples you can reference with audited financial statements from the past 2-3 years to verify the business model's viability?
#10
What training and ongoing support is provided given the Support & Training score of 69/100, which falls below the typical range of 74-91?
#11
The termination clause provides 30-day cure periods for most defaults and 90 days for failure to meet minimum venue requirements. Can you clarify what constitutes non-curable defaults?
#12
What encroachment protections would you provide to protect my exclusive territory, given the data shows no encroachment protection clause is currently in place?
#13
The binding arbitration clause prohibits class actions and jury trials. How many arbitrations has the franchisor pursued against franchisees in the past 3 years?
#14
Can you explain the discrepancy between the small number of terminations (1.8%) and the high closure rate (16.1%)? What percentage of closures are due to franchisor decisions versus owner decisions?
#15
The 5-year total potential term is significantly shorter than category norms. Under what conditions would a renewal be granted, and what is the renewal fee structure?
#16
What specific advertising and marketing support is included in the 1% ad fund, and how are those funds allocated across the system?
#17
Given the negative net unit growth of -8.9% in the past year, what growth initiatives or market expansion plans does the franchisor have in place?
#18
Can you provide contact information for at least 10 current and 5 former franchisees (especially those who closed units in 2024) that I can speak with confidentially?
#19
The Contract Terms score of 48/100 falls below the typical range. Which specific contract terms are most favorable to the franchisor, and which are negotiable?
#20