Given that TeaPulse has only 3 units currently, how long has the franchise system actually been operating and when did it begin franchising?
#1
The Ad Fund Rate of 1.0% is below the typical 1.5-3.0% range for Food & Beverage franchises. How is the advertising fund used, and has this lower rate proven sufficient for brand marketing?
#2
With 27 termination causes in the franchise agreement, which are specific to TeaPulse operations versus standard industry practices, and how do these compare to competitor agreements?
#3
The Total Potential Term of 10 years is shorter than the typical 15-20 years for this category. Why does TeaPulse use a 10-year initial term without renewal options, and what happens at the end of that period?
#4
Can you provide a detailed breakdown of what the 11 renewal conditions entail, particularly the requirement for a full remodel to current standards? How are remodel costs typically distributed?
#5
What is the typical initial investment required beyond the $29,800 franchise fee, and has the franchisor prepared Item 19 financial performance disclosures that would show actual unit profitability?
#6
How many franchise applications have been received, and what is the reason for such a small system size after operations began?
#7
The Non-Compete clause specifies 2 years and 10 miles. Have there been any disputes regarding this scope, and is this consistent with state law where you plan to operate?
#8
What happens if a franchisee wishes to renew after the initial 10-year term expires, and are renewal terms negotiable or fixed?
#9
Given the 14 non-curable defaults listed in the termination clause, can you provide examples of what qualifies as non-curable and whether 10 days is realistically sufficient to cure operational defaults?
#10
The Territory Exclusive field shows 'False' despite territory being protected. Please clarify what level of protection is actually provided and whether the franchisor can establish additional units in the same protected territory.
#11
Personal guarantees are required from all 5%+ owners with indemnification covering affiliates. What specific scenarios have triggered indemnification claims in other franchises operated by this franchisor?
#12
Since all 3 current units are relatively new, can you provide contact information for the franchisees operating them and confirm they are willing to discuss their experiences?
#13
What is the transfer fee of $10,000 used for, and does the franchisor have approval rights that could prevent a sale even if the fee is paid?
#14
How does the franchisor handle territorial disputes if new units are added, and what recourse do existing franchisees have?
#15