The system declined from 71 units 3 years ago to 54 units today. What specific operational or market challenges drove this 24% contraction, and what actions is the franchisor taking to stabilize or grow the system?
#1
Median gross sales of $121,205 are substantially below the typical range for sports franchises. What percentage of franchisees generate below $100,000 in annual gross revenue, and how does this impact viability and renewal eligibility?
#2
The franchise requires over $100,000 in gross revenues during the 9th year to qualify for renewal. What percentage of current franchisees meet this threshold, and how many have failed to renew or been terminated for this reason?
#3
Termination rate of 3.3% and non-renewal rate of 5.0% combine to an 8.3% annual loss rate beyond closures. Can you provide specific examples of franchisees terminated or not renewed, including the cited reasons?
#4
The 3-year turnover rate of 35.2% is more than triple the typical range. What percentage of this turnover is driven by franchisor terminations versus closures versus voluntary transfers, and what causes the highest volume?
#5
Why does the contract include 22 termination causes compared to the typical 15-21.75 range, and can you clarify which causes are non-curable with immediate termination versus curable with a 10-day notice period?
#6
The renewal conditions count of 11 exceeds the typical range of 6.0-8.0. What are these conditions beyond the $100,000 revenue requirement, and how often do franchisees fail to meet them?
#7
Total potential contract term of 30 years is longer than the typical 20 years. How much of this extends beyond your control as a franchisee, and what conditions allow the franchisor to decline renewal at year 10 or 20?
#8
The financial obligations clause includes late fees starting at $50 and escalating by $50 per month plus 1.5% monthly interest. How frequently do franchisees fall behind on payments, and what is the typical range of accumulated late fees?
#9
Personal guarantee requirements state that anyone with 5% or greater ownership interest must personally guarantee all franchisee obligations without limitation. Can you clarify how spousal liability is enforced, and are there options to limit personal exposure?
#10
The system had zero litigation cases over 3 years. Does this reflect no disputes with franchisees, or are disputes resolved through arbitration or confidential settlements that don't appear in public records?
#11
Transfer fee of $8,750 is below the typical range. How often are franchisee-to-franchisee transfers approved, and are there additional franchisor approval conditions beyond the stated fee?
#12
Current units reporting data is marked as N/A. How many of the 54 current franchisees submitted financial statements for Item 19 disclosure, and what percentage of franchisees actively report sales data?
#13
Closure rate of 13.3% versus termination rate of 3.3% suggests most exits are voluntary closures. Are these closures primarily due to profitability issues, or are there other contributing factors such as owner retirement or relocation?
#14
The non-compete clause is 2 years and 10 miles. Has this restriction ever been enforced, and what constitutes a violation—does it restrict similar sports facilities, coaching services, or only direct golf/tennis/athletics operations?
#15
System Health score is 15/100 versus typical 50.0-75.0 range. What specific factors contributed to this score, and what initiatives is the franchisor implementing to improve system stability and franchisee retention?
#16
Can you provide a breakdown of the 54 current units by location and revenue tier, and identify how many are struggling versus thriving to assess variance in performance?
#17