Steamatic

What specific circumstances led to the 4 unit terminations in 2024, and were there commonalities among the terminated franchisees?

The termination rate of 9.1% significantly exceeds the typical range for this category. What are the 5 curable defaults and 26 non-curable defaults listed in the agreement, and which have been the primary causes of terminations?

Can you provide details on the single litigation case filed against Steamatic? What was the claim, outcome, and settlement amount if applicable?

Given the 31 termination causes in the agreement versus a typical range of 14-22, can you explain why your franchise agreement includes substantially more termination provisions than competitors?

What specific 'minimum performance requirements' trigger the mandatory annual gross revenue growth requirement beginning in year two, and what happens if a franchisee misses this target?

How is the cost-of-living percentage increase determined for the minimum revenue growth requirement, and which index is used?

The total potential term of 25 years exceeds typical range. Can franchisees negotiate renewal terms, or are they automatically renewable at franchisor discretion?

What is the $100 late payment fee structure, and are there additional penalties beyond this for overdue royalties or ad fund payments?

The agreement requires purchasing from designated or approved suppliers only. Can you provide a list of mandatory suppliers and their typical pricing compared to open-market alternatives?

You retain rights to establish minimum purchase requirements. What are the current minimum purchase commitments, and how often do these increase?

Personal guarantees are required from all direct/indirect owners and spouses on a joint and several basis. Can these be negotiated for larger multi-unit franchisees?

The indemnification clause requires franchisees to indemnify the franchisor. What specific scenarios have triggered indemnification claims historically?

Disputes must be resolved through individual arbitration with a class action waiver. Has any franchisee challenged this provision, or has arbitration been used to resolve disputes?

What is the venue for arbitration proceedings, and what are typical costs for arbitration under your clause?

Only 2 units transferred in the past year while 8 units exited through closure or termination. What obstacles prevent franchisees from selling their businesses, and what approval process exists?

The 2-year/25-mile non-compete is enforceable post-exit. How strictly has this been enforced, and have there been legal disputes over this provision?

Despite the system maintaining 44 units, turnover of 9.1% suggests replacement recruitment is occurring. What is your current recruitment pipeline, and are new franchisees primarily converting from your terminated/closed units?

System Health score of 35 falls significantly below the typical range. Can you explain what factors contribute to this low score and what improvements are planned?

Financial Performance score of 40 is below typical range, and Item 19 is not provided. Can you share anonymized financial performance data, average unit volumes, and profit margins for franchisees?

What training and ongoing support are provided to address the system health concerns, particularly given Support & Training scored 90/100 while System Health scored 35/100?