Can you provide details on the 2 litigation cases filed within the past 3 years, including the nature of disputes, parties involved (since franchisor was neither plaintiff nor defendant), and outcomes?
#1
Financial performance data shows average gross sales of $310,242, significantly below the typical range of $386,914-$796,352 for this category. What factors contribute to this variance, and what are realistic sales expectations for new franchisees?
#2
Why is the transfer fee set at $24,750, which is approximately 44% higher than the typical range for this franchise category, and is this fee negotiable?
#3
The non-compete restriction is limited to 8 miles, which is substantially shorter than the typical 10-25 mile range. How does this shorter radius protect franchisees from direct competition post-exit?
#4
Your contract specifies 30 termination causes, nearly double the typical 15-21 found in comparable franchises. Can you explain which specific causes are most commonly invoked, and provide examples?
#5
The renewal fee is $24,750, which equals 50% of the current franchise fee. Can you clarify whether this fee increases with inflation or franchisor fee adjustments at renewal?
#6
During 2022-2023, 6 units ceased operations or closed (3 in 2022, 1 in 2023). Were these voluntary closures, franchisor-initiated, or due to specific market conditions, and have underlying issues been addressed?
#7
Your system has grown 82.35% year-over-year with a 72.88% 3-year CAGR. Is this growth rate sustainable, and what is your projection for unit growth over the next 3-5 years?
#8
The franchise requires exclusive purchases of 8 categories of items (stretch trainers, tables, uniforms, marketing materials) from franchisor or specified vendors. Can you provide a detailed cost breakdown of these mandatory purchases and whether pricing is competitively benchmarked?
#9
What specific training and ongoing support justify the Support & Training score of 81, particularly given it falls below the typical range of 82-93 for this category?
#10
The contract allows for a 72-hour cure period for health, safety, or sanitation violations versus 10-30 days for other defaults. What specific violations would trigger this shortened cure window, and what are examples of enforcement?
#11
As a franchisee, what indemnification obligations would I personally guarantee, and are there caps or insurance requirements to manage liability exposure?
#12
Can you clarify the 9 specified conditions required for renewal at years 10 and 15, and what percentage of franchisees have successfully renewed versus exited?
#13
With exclusive territory protection, how does StretchMed define and enforce territory boundaries, and what happens if demographic changes or competitor activity make a territory less viable?
#14
The median sales figure of $263,392 represents significant variance even within your current system. What explains the performance spread, and what support is provided to underperforming units?
#15
Are there any pending or recent regulatory investigations, particularly related to health and safety standards for stretch services or franchisee compliance?
#16
What is your process for approving or denying renewal applications, and have any franchisees been denied renewal in the past 5 years?
#17
How much working capital should a new franchisee have beyond the initial investment to sustain operations during ramp-up, given the lower-than-typical sales figures reported?
#18