The franchise fee of $35,000 is notably below the category average of $40,000-$55,000. What accounts for this lower entry cost, and are there any additional required expenses not reflected in the stated franchise fee?
#1
Your transfer fee of $26,250 exceeds the typical range by approximately 30%. Can you provide a detailed breakdown of what this fee covers and whether it is negotiable in any circumstances?
#2
The initial term of 7 years is significantly shorter than the category standard of 10 years. What is the franchisor's rationale for this shorter initial commitment, and what happens at the end of the renewal term?
#3
Can you explain the circumstances of the 3 unit transfers that occurred in 2022? Were these initiated by franchisees seeking to exit, or were they franchisor-managed transitions?
#4
Your system achieved 100% unit growth in the past year (from 5 to 10 units). What is the source of this growth—new franchisees, re-acquisitions, or corporate-owned locations—and what is the projected growth trajectory?
#5
The agreement contains 22 non-curable default provisions with only 5 days to cure monetary defaults. Can you provide the specific list of what constitutes non-curable defaults and examples of disputes that have resulted in termination?
#6
Post-termination non-compete restrictions extend 25 miles from any Sticky Fingers location. How many locations currently exist outside the franchisee's territory, and could this restriction effectively prevent a franchisee from working in their local market?
#7
All disputes must be resolved through mandatory binding arbitration in Denver, Colorado. What is the typical cost and duration of arbitration cases for franchise disputes under your agreement?
#8
The agreement requires personal guarantees with 18% annual interest on late payments plus a $150 flat fee. Have any franchisees been assessed these late fees, and what is the typical resolution process for payment disputes?
#9
What specific minimum performance standards must franchisees meet, and what are the consequences of failing to meet these standards beyond termination?
#10
Can you provide documentation of all franchisee support and training provided, given that your Support & Training score of 77 falls slightly below the category typical range?
#11
The renewal fee is $3,500. What does this fee include, and are there separate fees for contract renewal legal review or system updates at renewal?
#12
With zero litigation cases on record, have any disputes been resolved through your mandatory arbitration clause, and if so, what was the nature and outcome of those cases?
#13
What percentage of your current 10 units are still operating under the original franchisee, and how long have the most recently opened units been in operation?
#14
The ongoing fees total 9.0% (8% royalty + 1% ad fund) plus $375 technology fee annually. Are there any additional required fees, contributions, or mandatory purchases not reflected in these figures?
#15
Can you provide a detailed analysis of the gross sales figures ($382,735 median, $422,597 average)—how many units reported these figures, what is the range of performance, and what percentage of units meet or exceed the median?
#16
Given the shorter 7-year initial term, what is the non-renewal rate or franchisee decision not to renew at term end, and what percentage of franchisees have exercised their renewal option?
#17
Are spousal guarantees truly mandatory, and what specific obligations do spouses assume under the agreement?
#18
The agreement mandates class action waivers in arbitration. Have there been situations where multiple franchisees experienced similar issues that might have been addressed through collective action?
#19
What is your current franchisee satisfaction rate, and have any franchisees formally complained about territory encroachment, support quality, or fee structures despite the zero litigation record?
#20