The Exercise Coach

The termination rate of 3.8% is significantly higher than the typical 0.0-1.68% range. What are the primary reasons for franchisor-initiated terminations, and are there specific performance thresholds that trigger termination?

Terminations increased from 1 in 2022 to 8 in 2024. What operational or market changes led to this 8-fold increase, and what is the outlook for terminations going forward?

Your technology fee of $1,425 monthly is roughly double the typical range. What specific systems and services does this fee cover, and how is this fee calculated or adjusted annually?

Gross sales figures are 25-35% below the typical range for fitness franchises. What factors contribute to The Exercise Coach's lower revenue performance, and how do unit economics work at the lower sales levels?

The contract term of 10 years is substantially shorter than the typical 15-20 years. Why was the term set at 10 years, and what are the renewal options and associated fees?

Your agreement lists 26 termination causes, compared to a typical range of 15-21. Can you provide the full list of termination causes and clarify which are curable versus non-curable?

The transfer rate of 6.2% is above the typical 0.0-5.93% range. Are franchisees seeking transfers due to operational challenges, territory issues, or other factors? What is the franchisor's approval rate for requested transfers?

With no renewal options listed, what happens at the end of the 10-year initial term? Can franchisees renew, and if so, on what terms and at what cost?

The ad fund rate of 1.0% is half the typical 2.0%. How is this lower rate justified, and does it provide sufficient marketing support compared to competing franchise systems?

Can you provide specific financial performance data (Item 19) showing unit profitability, operating expenses, and break-even timelines? What percentage of units are profitable?

The personal guarantee clause covers all owners and their spouses for all monetary obligations. Can you explain the scope of personal liability and whether there are any limits or exceptions to the guarantee?

The operational control clause requires purchasing from 8 categories of designated suppliers with franchisor approval for pricing changes over 5%. How much flexibility do franchisees have in supplier selection and pricing negotiations?

No litigation cases have been reported. Has the franchisor faced any regulatory complaints, Better Business Bureau complaints, or arbitrations that would not appear in litigation data?

The agreement contains 4 curable defaults with cure periods as short as 24 hours for health/safety hazards. Can you provide examples of what constitutes a health/safety hazard that requires 24-hour cure?

What is the renewal fee or re-licensing cost at the end of the 10-year term, and are there any other significant fees associated with contract renewal?

Given the 2-year/10-mile non-compete clause, what specific restrictions apply if a franchisee does not renew or chooses to exit the system?

Can you explain the indemnification clause in detail? What specific claims or liabilities must franchisees defend the franchisor against?

Are there any territories that have experienced multiple unit closures or terminations? If so, what are the specific market or operational challenges in those areas?