STEM Builders Learning Center

Can you provide details about the one unit closure in 2024—was it voluntary exit, non-renewal, or franchisor-initiated termination?

Why has the franchise system experienced a 25% turnover rate in the past year, and what factors do you believe contributed to the unit closure?

What specific support or operational improvements have been implemented since the 2024 closure to stabilize the remaining 4 units?

With only 4 current units and no growth since 2023, what are the franchisor's plans for system expansion and franchisee recruitment?

The Franchise Fee of 25,000 is significantly lower than the typical range of 40,000-55,000—how does this lower fee impact the level of initial support and training provided?

Can you explain the 10 renewal conditions required for the single renewal option? Which conditions have been most challenging for franchisees to meet?

The initial term is only 5 years versus the typical 10 years for childcare franchises. What is the rationale for this shorter contract duration, and how does it affect long-term business planning?

The non-compete radius is 50 miles, double the typical range. How will this broader restriction impact franchisees' ability to pursue competing opportunities after contract termination?

Why does the contract contain 17 non-curable defaults when the typical range is lower? Can you provide examples of what constitutes a non-curable default?

What financial performance benchmarks or Item 19 data can you share to demonstrate the viability of individual franchise units?

The System Health Score is 0/100. What specific metrics or operations contributed to this score, and what remediation steps are planned?

How many units did not renew their contracts versus voluntarily close in the past 3 years, and what were the primary reasons for non-renewal?

Given the high 3-year turnover rate of 33.3%, what retention strategies are you implementing for existing franchisees?

Can you detail the mandatory remodeling and refurbishment requirements for renewal and provide estimated costs?

The Risk Factors Score is 43/100, below the typical range. What are the primary risk factors identified, and how do you mitigate them for new franchisees?

Is the renewal fee of 5,000 (capped at 50% of then-current initial fee) standard across all renewal scenarios, or are there exceptions?

What training, ongoing support, and marketing assistance are included to justify the 7% royalty plus 2% ad fund totaling 9% in annual ongoing fees?

Have any franchisees challenged the cross-default provision that ties performance to other affiliate agreements, and what disputes resulted?

With mandatory binding arbitration in Hennepin County, Minnesota, what are the typical dispute resolution costs and timelines experienced by franchisees?

How many franchisees have successfully renewed their contracts, and what percentage of franchisees are eligible for the available renewal term?