Given the 21.1% unit exit rate in the past year compared to the typical range of 0.0-7.25%, what specific factors drove the closure of 6 units in 2024?
#1
Can you provide detailed reasons for the 3-year unit decline from 25 to 15 units? Were closures primarily due to profitability issues, location performance, or other factors?
#2
The technology fee of $500 monthly is the highest component of ongoing fees. What specific technology services and platforms does this fee cover?
#3
How does the $500 monthly technology fee compare to competitors in the bubble tea/flavored tea space?
#4
Why is the initial term only 5 years when the typical range for this category is 7.75-10.0 years, and does this shorter term affect renewal probability?
#5
Can you explain the discrepancy between the lower royalty rate of 4.0% and the higher technology fee of $500 monthly compared to industry standards?
#6
What are the specific 8 conditions required to qualify for the single 5-year renewal option?
#7
Given that territory is protected but not exclusive, what encroachment safeguards exist to prevent the franchisor from opening competing units nearby?
#8
Can you provide examples of the 10 categories of supplier restrictions and explain the pricing and margin structures for approved suppliers?
#9
What support and training is included in the franchise package given the 84/100 Support & Training score?
#10
The non-compete clause covers a broad range of beverages (flavored tea, milk tea, boba drinks, etc.). How broadly does the franchisor interpret this restriction?
#11
How many of the 4 closures in 2025 and 6 closures in 2024 were attributed to struggling unit economics versus operator choice?
#12
What is the average unit volume (AUV) for operating units, and how does this compare to median gross sales of $607,624?
#13
The System Health score is 0/100. What specific data points contribute to this score, and what does this indicate about system transparency or reporting?
#14
Can you provide the detailed criteria for the renewal fee of $3,000 and any required facility upgrades or remodeling costs at renewal?
#15
How does the franchisor define and measure compliance for the 8 renewal conditions, and what remediation options exist if a franchisee is slightly out of compliance?
#16
Given the arbitration requirement in Los Angeles County, what is the average cost and timeline for disputes, and are there any appeal rights?
#17
What are the specific obligations and potential liability exposure from the spouse personal guarantee clause?
#18
Are there any Item 19 financial performance metrics broken down by unit age, location type, or other demographic factors that would help assess unit profitability?
#19
What post-franchise support or de-escalation efforts does the franchisor offer when units begin underperforming, given the high closure rate in recent years?
#20