The Human Bean

Why does The Human Bean charge 0.0% royalties when the typical range for coffee franchises is 5.0-6.0%? Is there a financial or operational reason for this significantly lower rate?

The ad fund rate is 1.0% compared to the typical 2.0-3.0% range. How is the marketing fund allocated, and does this lower rate provide sufficient support for franchisee marketing initiatives?

What accounts for the spike in closures and ceased operations from 3 cases in 2022 to 18 combined closures/ceased in 2023, followed by a decline to 4 in 2024? Were there operational, market, or franchise-specific issues?

The total potential contract term is 10 years compared to the typical 20-year range. Why is the contract term shorter, and what are the renewal conditions if a franchisee wants to continue beyond the initial 10 years?

Can you provide details on the 9 termination causes listed in the franchise agreement? How do these compare to industry standards, and which causes are most commonly cited?

The binding arbitration clause specifies Medford, Oregon as the sole venue. How does this affect franchisees located far from Oregon in terms of dispute resolution costs and feasibility?

The agreement requires joint and several personal guarantees from all control group members and their spouses. Can you clarify what qualifies as a 'control group member' and what happens to personal assets in case of franchise failure?

What specific indemnification obligations do franchisees bear, and are there caps on liability exposure or insurance requirements to mitigate these risks?

With a $5,000 transfer fee below the typical $8,750-$20,000 range, what services or approvals are included? Is there a simplified approval process for transfers given the lower fee?

How many franchisees utilized the transfer option in 2023 and 2024 (14 and 3 transfers respectively)? What makes transfers so common compared to industry averages?

Item 19 shows median gross sales of $799,586. What is the cost of goods sold and net profit margin for a typical unit, and how do these vary by location type or operating model?

How many franchisees reported sales figures for the Item 19 calculation, and what percentage of the system is this representing? Are there significant variations by franchise age or location?

The franchise provides exclusive territory protection but the specific territory size and parameters are not detailed. How are territory boundaries determined, and what safeguards prevent encroachment?

Support and training scores at 80/100 are below the typical 88.0-100.0 range for this category. What specific support areas are lacking, and how can these be addressed?

Contract terms score 55/100, below the typical 60.0-65.0 range. Which contract terms are considered unfavorable, and are there any negotiable provisions for experienced franchisees?

Investment costs score 63/100, below the typical 75.0-75.0 range. Beyond the franchise fee, what are the total startup costs, and how do they compare to projected revenue timelines?

The ongoing fees score 75/100, above the typical 62.0% range. What comprises the ongoing fees beyond the 1.0% ad fund, and are there any additional fees not disclosed?

Have there been any litigation cases against The Human Bean in the past 5+ years that may not appear in the 3-year window? If so, what were the outcomes?

What is the franchisee satisfaction rate or renewal intent for those approaching the end of their 10-year initial term? How many franchisees have renewed or exited at term expiration?

Are there any plans to extend the total potential term beyond 10 years, or is this a hard limit by design? What are the implications for long-term franchisee investment?