The advertising fund rate of 3.25% exceeds the typical range for this category—how is this fund allocated and can you provide historical spending reports showing how these funds have been used?
#1
The franchise fee of $15,000 is substantially below the typical $30,000-$40,000 range for Food & Beverage franchises—are there additional startup costs or equipment fees not reflected in this amount that franchisees should anticipate?
#2
With a termination rate of 0.7%, which is above the typical 0.0%-0.6% range, can you provide details about the 2 terminations in 2024 and the circumstances that led to them?
#3
Your median gross sales of $924,379 significantly exceed the typical range—can you explain what factors drive this above-average performance and whether these results are typical across all unit locations and formats?
#4
The franchise agreement requires exclusive purchasing of Specialty Hams from HBH or designated suppliers—what percentage of a unit's inventory cost typically goes to this exclusive product category?
#5
Can you provide the breakdown of the one historical litigation case filed against HBH, including the nature of the claim, outcome, and any impact on franchise operations?
#6
The agreement allows for spouse or family member guarantees in addition to owner guarantees—in practice, what percentage of franchise agreements require these additional personal guarantees?
#7
With renewal requiring the franchisee to sign HBH's then-current franchise agreement form, can you provide examples of how agreement terms have changed across previous renewal cycles?
#8
The renewal fee is $7,500—are there any other fees, compliance audits, or facility upgrades required as conditions for renewal beyond the 7 specified conditions mentioned?
#9
Given that the system had zero net growth over the past year despite 439 units, what strategies is HBH implementing to support unit profitability and reduce exits?
#10
Can you explain the distinction between the 4 'Ceased Other' exits in 2023 and the traditional closure/transfer categories, and what circumstances typically fall into this category?
#11
The dispute resolution clause includes class action and jury trial waivers with mandatory litigation in HBH's home state—has this provision affected how disputes have been resolved in past litigation?
#12
With a non-compete restriction of 2 years within 15 miles, how is this distance measured and applied in multi-unit or urban markets where territorial boundaries may overlap?
#13
Can you provide details on the 13 non-curable defaults identified in the termination clause and clarify what actions would result in immediate termination without a cure period?
#14
The system shows stronger sales performance than typical ($924,379 median vs $811,216 typical)—are there geographic, demographic, or operational factors that correlate with top-performing units?
#15
What specific support and training programs contribute to the 100/100 Support & Training score, and what ongoing training is required or recommended after the initial franchise launch?
#16
For the 8 transfers in 2024, can you describe the typical profile of incoming franchisees and whether existing units are more likely to be transferred to experienced franchisees or new operators?
#17
The technology fee is $110 monthly—what systems and services does this cover, and have these fees remained stable or changed over the past 3 years?
#18
Can you provide examples of how HBH's 'designated suppliers' for non-Specialty Ham inventory are selected and whether franchisees have any input in these vendor relationships?
#19