Can the franchisor provide a detailed breakdown of the 12 cases initiated by the franchisor as plaintiff, including case outcomes and whether they were primarily against franchisees, lenders, or other parties?
#1
What specific defaults or contractual violations led to the 18 terminations in 2024, and how does this compare to historical termination patterns?
#2
The technology fee of $41/month is substantially lower than industry norms ($147.50-$734.00). What technology platform and services are included, and are there plans to increase this fee?
#3
Given the declining unit count from 238 to 218 over 3 years, what is the franchisor's strategy to stabilize or grow the system, and what support is being provided to existing franchisees?
#4
The transfer fee of $1,000 is significantly below industry standards ($12,500-$50,000). Are there any additional transfer costs or approval requirements not reflected in this figure?
#5
Can you provide details on the 8 cases where the franchisor was defendant, including the nature of claims and resolution outcomes?
#6
The non-compete clause provides 0 years and 0 miles restriction after franchise termination. What provisions exist to prevent franchisees from opening competing hotels immediately in the same market?
#7
Why does the contract include 17 termination causes, which is above typical range, and can specific examples be provided of situations requiring cure periods versus immediate termination?
#8
The 12.4% annual turnover rate (2024) includes 12 terminations, 27 closures, and 15 'ceased other' units. What does 'ceased other' mean, and are these units still generating any revenue or franchise fees?
#9
Total potential contract term is 15 years compared to typical 20-30 years for hospitality franchises. What is the rationale for the shorter potential term, and what renewal options exist beyond the initial 15-year term?
#10
The ad fund rate of 4.0% is above typical range (2.25-3.5%). How is this fund managed, and what is the breakdown of marketing spend across digital, local, and national initiatives?
#11
Can you provide the franchise disclosure document (FDD) Item 19 with unit sales data, as it is not currently available?
#12
Given the royalty rate of 4.0% is below industry norms (5.0-5.5%), are there any volume-based tiered royalties or escalation clauses in the agreement?
#13
The personal guarantee requirement referenced in the liability clause applies to all principals and officers. Can this be negotiated or limited, and does it survive termination of the franchise?
#14
Of the 29 closures in 2023, 23 are categorized as 'ceased other.' Can you clarify the reasons behind these exits and whether franchisees received any support or buy-back options?
#15
The system declined 20 units in 2024 despite 5 transfers and 18 terminations. What was the impact of new unit sales, and what is the current pipeline for new franchise openings?
#16
Are there any ongoing litigation cases not reflected in the pending count that may affect franchisees, such as class actions or regulatory investigations?
#17
The franchisor has initiated 12 cases as plaintiff. Have any resulted in judgments requiring franchisees to pay damages or repay franchise fees, and could similar claims apply to current franchisees?
#18
What financial performance benchmarks should a prospective franchisee expect, given that Item 19 financial disclosure is not available?
#19