The franchise has grown from 1 unit to 10 units in one year (900% growth). What is the sales and operational performance of these newly opened units compared to the original location?
#1
Given that average gross sales of $82,084 are substantially below typical for this category, what are the actual profit margins and net income figures for existing franchisees?
#2
Can you provide detailed unit-level financial performance data (Item 19) broken down by location, including which units are profitable and at what sales level franchisees typically break even?
#3
The transfer fee of $20,000 is above the typical range for this franchise type. What does this fee include, and are there circumstances where it might be waived or reduced?
#4
With a total potential term of 25 years (5 years longer than typical), what happens to franchisees who don't renew after the initial 10-year period? Are there any renewal incentives or penalties?
#5
You have zero litigation cases on record, but you also have a very small system (10 units). As the system grows, have you had any franchisee complaints, disputes, or concerns that didn't result in formal litigation?
#6
The non-compete clause covers 2 years and 25 miles. Can you clarify what specific competitive activities are prohibited (indoor golf simulators, driving ranges, golf lessons, etc.) and provide examples of violations?
#7
The termination clause allows immediate termination for 19 non-curable defaults. Can you provide the complete list of these non-curable defaults and explain how strictly they have been enforced historically?
#8
Personal guarantees are required and franchisees must indemnify the franchisor against all claims. Can you provide examples of how this has been applied in practice, and are there any limits on franchisor liability?
#9
Late payment interest is 18% annually. How many franchisees have incurred late payment fees, and what is the primary reason for payment delays when they occur?
#10
Mandatory advertising cooperative participation is required. What is the budget, how is it spent, and can individual franchisees see ROI data from cooperative advertising campaigns?
#11
The franchise requires $1,000,000 in general liability insurance. Is this standard for golf simulator facilities, and what claims history or concerns led to this requirement?
#12
What is the actual failure rate or non-renewal rate expected in the first 5 years? Given the minimal data available, can you provide guidance on realistic unit performance timelines?
#13
Can you explain why the franchise growth was delayed until 2023 (going from 0 units in 3 years ago to 1 in the following year to 10 current units)? What changed in 2023 to enable rapid expansion?
#14
Are there any franchisees who have expressed interest in selling or transferring their units in the near term, and what would that transfer process look like given the $20,000 transfer fee?
#15
The renewal fee is $5,000. Are there any additional fees, restocking requirements, or system upgrades that franchisees must complete at renewal?
#16
What support, training, and ongoing operational assistance is provided to franchisees? How much of this support is included in ongoing fees versus what costs extra?
#17
What is the target customer base for Back Nine Golf locations (golf enthusiasts, corporate events, casual recreation), and how does this affect unit performance and sales expectations?
#18
Can you provide references from franchisees at each of the 10 current locations, and are any of them willing to discuss their financial performance and experience with the franchisor?
#19
What are the performance benchmarks mentioned in the financial obligations clause? How are these measured, and what happens if franchisees fail to meet them?
#20