TacoTime

The franchisor has been defendant in 8 litigation cases over the available period, well above the typical range. What are the primary causes of these cases, and how many remain unresolved or have resulted in settlements?

With 5 litigation cases filed in the past 3 years alone, is there a pattern or trend emerging? Are specific issues (operational disputes, payment defaults, trademark/IP matters) driving the increase?

The technology fee of $75/month is substantially below industry norms for QSR franchises. Is this fee subject to increase, and are there minimum requirements or expectations for technology adoption and upgrades?

Why does the total potential contract term of 15 years fall below the typical 20-30 year range for QSR franchises? What is the strategic reason for limiting the total potential commitment?

Renewal requires meeting 10 conditions—above the typical 7-9 conditions. What are these 10 conditions specifically, and how commonly do franchisees fail to meet them at renewal?

The unit count has declined from 105 to 99 over 3 years with a CAGR of -1.94%. Are there specific markets or regions showing stronger or weaker performance, and is the franchisor actively recruiting in underperforming areas?

Transfer rate is 5.2% annually—why are existing franchisees selling their units? Are transfers primarily driven by profitability concerns, owner retirement, or other factors?

Territory is not exclusive and encroachment protection is not provided. What prevents the franchisor from opening additional TacoTime locations within or adjacent to your territory?

The termination clause provides cure periods as short as less than 24 hours for social media policy violations. Can you provide specific examples of what constitutes a social media violation, and how frequently are franchisees terminated for this reason?

Non-curable defaults number 18 according to the termination clause. Can you provide the full list of non-curable defaults, and are any of these enforced more strictly than others?

Dispute resolution requires mandatory binding arbitration through AAA with class action waivers. What is the average cost and duration of arbitration disputes involving franchisees, and can you share anonymized case summaries?

Personal guarantees are required from all principals and spouses covering all franchisee obligations. Has this indemnification been enforced against personal assets or spouses in prior disputes, and in what circumstances?

The renewal fee is $15,000 with only one 5-year renewal option available (no further renewals). What happens at the end of the 15-year potential term—can franchisees negotiate extended renewal options?

Median gross sales of $824,815 are provided in Item 19. What is the median net profit after all fees and expenses, and how many franchisees are currently meeting or exceeding this sales benchmark?

The non-compete is 2 years and 10 miles post-termination or non-renewal. Are there any exceptions or negotiations available for franchisees who exit voluntarily, and how aggressively does the franchisor enforce this clause?

With 5 closures and 7 other exits (transferred or ceased) in the past 3 years, what support did the franchisor provide to franchisees facing financial difficulty, and are there documented turnaround success cases?

Has the franchisor filed any litigation as plaintiff against franchisees (2 cases on record)? What were the outcomes, and do they represent a pattern of enforcement over franchisee disputes?

What specific services, training, and support justify the 6% royalty rate, and how has the quality or scope of support evolved over the past 3 years as the system contracted?