The 10.0% royalty rate significantly exceeds the typical 5.0-6.0% for QSR franchises. What justification does the franchisor provide for this premium rate, and is it negotiable?
#1
The $750 monthly technology fee is nearly double the typical range. What specific systems and services are included in this fee, and what is the breakdown between POS, ordering, delivery, and other technology costs?
#2
The 3-year turnover rate of 17.5% is elevated above the typical 0.9-15.5%. What are the primary reasons franchisees cite when exiting, and has the franchisor implemented changes to address this?
#3
Closures remained at 5.9% annually in 2024, still above the typical range. Are there specific geographic regions or unit types with higher closure rates, and what support does the franchisor provide to at-risk locations?
#4
The initial 10-year term with no renewal options is substantially shorter than the typical 20-30 years. Does the franchisor grant renewals as discretionary decisions, and what fees or requirements apply to renewal?
#5
The non-compete is limited to 1 year / 10 miles, well below the typical 2-year standard. Does this allow for rapid re-entry by former franchisees in the same territory, and has this caused direct competition issues?
#6
The renewal fee of $11,250 ($1,125 annually) combined with the $750 monthly technology fee totals $10,200 yearly in ongoing fees. What is the typical total annual cost for a franchisee beyond royalties?
#7
The franchise fee is $22,500, the lowest in the category. What is included in this fee, and are there significant additional startup costs beyond this stated amount?
#8
Despite zero litigation cases reported, the Liability/Indemnification clause requires personal guarantees from all stockholders and spouses. Have franchisees raised concerns about personal liability exposure?
#9
The Renewal Conditions clause states the licensee has no expectation of renewal and renewal is entirely discretionary. How many franchisees have been denied renewal, and what criteria determine renewal eligibility?
#10
The Termination clause allows 30-day cure periods but includes 4 non-curable defaults. What are the specific non-curable defaults that could result in immediate termination without opportunity to remedy?
#11
Unit count declined from 239 in 2022 to 238 in 2024 despite net growth of 2 units in the past year. What was the franchisee composition during 2023 when the system dropped to 236 units?
#12
Transfers increased significantly from 1 in 2022 to 7 in 2024. What are the typical reasons for transfers, and does the $7,500 transfer fee present barriers to unit sales between franchisees?
#13
The System Health score of 47 falls below the typical range of 50-75. What specific operational or support metrics contribute to this below-average rating?
#14
With no exclusive territory protection and non-compete limited to 1 year / 10 miles, how does the franchisor prevent company-owned or other franchisee locations from cannibalizing sales?
#15
The Ongoing Fees score of 54 is below the typical 60-62 range. Beyond the 10.0% royalty and $750 technology fee, what other mandatory fees or contributions do franchisees incur?
#16
No Item 19 financial performance data is available. Can the franchisor provide average unit volumes (AUV), profit margins, or other financial benchmarks for comparable units?
#17
Transfer and renewal fees total $18,750 ($7,500 + $11,250) over a 10-year term. How do franchisees view these costs relative to other QSR opportunities with longer terms?
#18
The 5.9% closure rate in 2024 represents approximately 14 units. What has changed since 2022 when closures were 23 units, and are these improvements expected to continue?
#19
Given the short 10-year potential term and lack of renewal expectation, how do franchisees finance multi-year buildouts or equipment upgrades when renewal is uncertain?
#20