Sub Zero Ice Cream

What specific factors contributed to the significant increase in unit closures in 2023 (10 closures), and what changes has the franchisor made to address the underlying causes?

Can you provide details on the 8 'ceased other' closures in 2023? What does this category specifically include?

The system has declined from 46 to 40 units over 3 years despite recent recovery. What is the franchisor's strategic plan to return the system to growth?

How do the reported median sales of $219,991 compare to the actual operating costs and profitability thresholds franchisees need to remain viable?

What percentage of franchisees in the bottom quartile (earning approximately $127,031) are able to sustain operations profitably at current royalty rates?

Can you explain why the termination rate of 2.6% is significantly higher than typical for this category? What violations most commonly trigger terminations?

The initial contract term is only 5 years compared to 7.75-10 years typical for food franchises. What is the business rationale for this shorter term, and does it affect long-term franchisee viability?

With a total potential contract term of only 5 years versus typical 15-20 year terms, how do franchisees justify capital investments in buildout and equipment?

The renewal fee is $2,500 with only 4 renewal conditions versus the typical 7-9 conditions. What are the specific renewal requirements, and how easily do existing franchisees achieve renewal?

Can you provide a breakdown of the reasons for the 2.6% non-renewal rate? Are franchisees choosing not to renew, or is the franchisor declining to renew?

The technology fee of $65 monthly is lower than typical. What services and systems does this fee cover, and are there additional technology costs franchisees should expect?

You mentioned 'approved suppliers' in the operational control clause. How many approved suppliers exist for each major category, and can franchisees request approval for alternative suppliers?

What is the average actual profitability for franchisees in the top quartile ($342,843 gross sales), and what percentage of the system operates in this range?

How are the minimum monthly royalty requirements ($500 first year, $600 second year, $700 third year) applied to standard locations versus mobile units, and what percentage of franchisees are subject to these minimums?

Can you provide the average cost of royalty and fee payments as a percentage of gross sales for franchisees at median sales levels of $219,991?

Given the protected but non-exclusive territory, how does the franchisor define and enforce encroachment protection, and have there been disputes over territory overlap?

What is the typical payback period for the $35,000 franchise fee and initial buildout costs, given the reported sales figures?

The dispute resolution clause requires binding arbitration in Salt Lake City, Utah. Are there any cost estimates you can provide for arbitration proceedings, and what appeal rights exist?

Can you explain the 1.5% monthly service charge on late payments and provide examples of how frequently this charge is applied across the system?

What percentage of new franchisees fail within the first 3 years, and how does this compare to the broader food and beverage franchise industry?