What specific services or deliverables does the $1,700 monthly technology fee cover, and how is this fee calculated or adjusted annually?
#1
Can you provide detailed performance data for the 8 units that opened in the past year, including their average sales, profitability, and time to break-even?
#2
Why is the total potential contract term 10 years compared to the typical 15-20 years in this category, and what are the conditions under which the franchise relationship could end before 10 years?
#3
Given the 8.0% royalty rate exceeds the typical 6.0-7.5% range, what additional services or support justify the higher royalty structure?
#4
Can you explain the rationale behind the $25,000 transfer fee, which is approximately 47% higher than the typical range of $10,000-$17,138.50?
#5
How many of the current 12 units are franchisee-owned versus company-owned or otherwise controlled by the franchisor?
#6
What is the average time to profitability for Studio Pilates franchisees, and what percentage of franchisees have achieved the reported average sales of $649,212?
#7
As a young franchise system, do you have any historical data on franchisee satisfaction, renewal rates, or reasons why units might not renew at the end of their 10-year term?
#8
The non-compete clause restricts franchisees for 2 years within 10 miles of their location and all other franchise locations—can you clarify the geographic scope if the system expands significantly?
#9
Can you provide the full list of the 12 immediate termination events mentioned in the termination clause, beyond the 3 curable defaults?
#10
Regarding the transfer restrictions and 21-day right of first refusal, if a franchisee receives a third-party offer, does the franchisor have the option to match terms or must it exercise the right on identical terms?
#11
The arbitration clause specifies JAMS offices in New York or nearest to the franchisor's principal office—where is the franchisor's principal office located, and what would arbitration costs typically be?
#12
Personal guarantees are required from principals—does this include personal liability for operational decisions, or is it limited to financial obligations only?
#13
What approved suppliers are available for the 5 mandatory purchase categories (reformers, audio-visual equipment, CCTV, computers, and related supplies), and are franchisees required to use franchisor-supplied equipment or can they source from approved third parties?
#14
How does the franchisor determine which equipment, supplies, or services are 'approved' for franchisee use, and what is the process for a franchisee to request approval for alternative vendors?
#15
Given the rapid unit expansion of 140% in the past year, what is the franchisor's growth strategy for the next 3-5 years, and could this impact the exclusivity of existing territories?
#16
Are there any pending litigation cases, regulatory investigations, or complaints from franchisees that are not reflected in the 0 cases reported, particularly regarding territory encroachment or fee disputes?
#17
What is the average unit volume (AUV) across all reporting units, and what percentage of current franchisees exceed the median gross sales of $488,928?
#18
Can you provide copies of 3-5 signed unit-level franchise agreements and Item 19 financial performance representations so I can have them reviewed by my franchise attorney?
#19
What support, training, and marketing assistance does the franchisor provide to new franchisees during the initial ramp-up period, given the high monthly technology fee of $1,700?
#20