The franchise agreement lists 24 termination causes, which exceeds the typical range for this category. Can you provide a breakdown of these 24 causes and clarify which ones are most commonly cited in practice?
#1
Cure periods for termination violations range from 10 days for failure to retain a qualified General Manager to 30 days for other breaches. How strictly are these cure periods enforced, and what percentage of franchisees successfully cure violations?
#2
Your non-compete clause restricts franchisees for 2 years within 20 miles of their former territory or any other Taste Buds Kitchen location. Given the current 12-unit system size, how many franchisees would be affected by the 20-mile radius, and are there geographic exceptions?
#3
The Personal Guarantee requirement extends to all shareholders, partners, and their spouses. Can you explain the circumstances under which you have enforced personal guarantees against individual guarantors?
#4
Your exclusive purchasing policy requires all food, beverage, furniture, fixtures, and merchandise to be sourced from the franchisor or approved vendors. What percentage of a typical franchisee's cost of goods sold goes to franchisor-controlled suppliers?
#5
The Support & Training score is 99, significantly above the typical range of 78.3-97.8. Can you detail the specific training programs, ongoing support, and materials included in this score?
#6
Why does the Investment score of 42 fall significantly below the typical range of 75.0? What are the total startup costs beyond the $49,500 franchise fee?
#7
The Financial Performance score of 65 exceeds the typical range of 54.0-60.0. Are the reported gross sales figures of $641,304 (median) and $724,442 (average) after franchisor fees, cost of goods, or are they gross revenue?
#8
How many franchisees are represented in the Item 19 financial performance data, and what percentage of the system do they represent?
#9
You report zero litigation cases over 3 years. Is this truly the case, or are you excluding settled disputes, arbitration cases, or claims that did not proceed to formal litigation?
#10
With zero terminations and zero non-renewals in your 3-year history, what is the typical franchisee profile that succeeds in this system, and are there any franchisees who have expressed concerns or requested early termination?
#11
The renewal fee is $10,000. What are the conditions for renewal, and can you provide examples of franchisees who were denied renewal?
#12
Territory is marked as protected but not exclusive. Can you clarify what protection is offered, and under what circumstances you might add a second Taste Buds Kitchen location near an existing franchisee?
#13
Can you provide the average unit volume (AUV) and return on investment (ROI) for franchisees by year of operation to assess long-term profitability?
#14
The system has grown by only 1 unit over 3 years (from 11 to 12). What is your growth strategy for the next 3-5 years, and what support will franchisees receive during expansion phases?
#15
Are there any pending disputes, complaints filed with state regulators, or investigation by franchise regulators that are not reflected in the formal litigation data?
#16
The franchise agreement requires completion of specified conditions for renewal. Can you provide the complete list of these 9 conditions and explain how often franchisees fail to meet them?
#17
What happens if a franchisee wants to exit the system before the end of their 10-year initial term? Are there buy-back options, or are they required to find a buyer approved by the franchisor?
#18
How is the $425 monthly technology fee calculated, and what specific technology services and systems does it cover?
#19