Studio 6

The franchise fee of $25,000 is significantly below the typical range of $35,000-$75,000 for hospitality franchises. What is the rationale for this below-market pricing, and are there plans to adjust fees for new franchisees?

Termination rate of 3.3% is more than double the typical range of 0.0-1.6%. What are the primary reasons franchisees are being terminated, and what percentage of terminations are due to non-payment versus operational/compliance issues?

The system terminated 9 franchisees in 2024 out of 273 units. Can you provide specific examples of the operational or contractual violations that led to recent terminations?

Can you provide details on the 1 pending litigation case, including the nature of the claim, when it was filed, and the franchisor's position?

What were the circumstances of the 3 cases where the franchisor was named as defendant, and what were the outcomes or settlements?

The renewal conditions count of 8 exceeds typical ranges. What specific conditions must be met to qualify for renewal, and how many franchisees have been denied renewal in the past 5 years?

Given the 12-18 month advance notice requirement for renewal, how many franchisees have provided notice of intent to renew in the past 12 months?

The franchise agreement requires sourcing from franchisor-approved suppliers only across 5 categories. What is the typical cost differential between approved suppliers and alternative vendors, and are there performance benchmarks for approved suppliers?

Can you provide the Item 19 financial performance information, including median and average unit volumes, occupancy rates, and profitability data for comparable Studio 6 locations?

The system grew from 240 to 273 units in 2024 (13.75% growth), but also closed 11 units and terminated 9 franchisees. How many of the new 33 units are conversions of existing properties versus ground-up developments?

What is the average tenure of terminated franchisees? Are terminations occurring primarily among newer franchisees or established operators?

The territory is protected but not exclusive. How does the franchisor define protected territory, and what prevents encroachment by company-owned or franchised units in adjacent areas?

The personal guarantee clause has unlimited scope and covers the franchisee's performance obligations. Are there any carve-outs or limitations to the personal guarantee in practice?

Can you explain the difference between the 4.0% turnover rate (1-year) and the 3.3% termination rate, including the mix of voluntary closures, transfers, and other exits?

The 3-year turnover rate of 18.4% exceeds typical ranges. What portion of these exits were voluntary versus franchisor-initiated, and have turnover trends improved, worsened, or remained stable?

Technology fee is $300 annually. What technology platforms and services are included, and are there additional technology costs not covered by this fee?

Transfer fee is $12,500, which equals the renewal fee. Has the franchisor ever denied a transfer request, and under what circumstances would a transfer be denied?

The franchise agreement allows for cure periods of 5 days for payment defaults and up to 30 days for other curable defaults. Can you provide examples of what constitutes a 'curable default' versus a non-curable material breach?

System health score is 85, significantly above typical ranges. What key metrics drive this high score, and how does Studio 6 compare to competitors on unit retention and franchisee satisfaction?