The Medicine Shoppe

The franchise fee is $0 and royalty is 3.0%—both significantly below industry norms. How does the franchisor sustain operations and provide support with these lower fee structures compared to typical retail franchises charging $25,000-$40,000 franchise fees and 4.38-6.0% royalties?

System units have declined 26 from 297 to 271 over 3 years (3-year CAGR of -3.01%). What specific factors contributed to these closures and terminations, and what changes are being implemented to reverse this trend?

The 1-year exit rate of 10.7% (21 units) significantly exceeds the typical 1.8-8.73% range. Can you provide details on which 21 units exited, how many were franchisor terminations versus voluntary closures, and the primary reasons cited?

Franchisor terminations account for 7.2% of the system annually, well above the typical 0.0-2.28% range. What are the primary contractual violations or performance issues leading to these terminations?

The franchise has 3 cases in the past 3 years where the franchisor was defendant—above the typical range. What were the nature and outcomes of these cases, and are there any ongoing claims or settlements affecting franchisees?

The franchisor initiated 2 cases as plaintiff against parties (typical range 0.0). What were these cases regarding, and do they relate to franchisee disputes or other business matters?

The initial term is only 5 years with a total potential term of 5 years, below the typical 10-year initial term. Why is the term so short, and what conditions must be met for renewal?

With zero non-compete restriction (0 years / 0 miles versus typical 2.0 years / 10.0-20.0 miles), what prevents a franchisee from opening a competing pharmacy immediately after franchise termination or expiration?

Territory is explicitly non-exclusive with no encroachment protection. How does the franchisor prevent or manage situations where multiple Medicine Shoppe franchises or corporate locations compete in the same area?

The transfer fee is only $1,000, significantly below the typical $8,333-$20,000 range. What is included in this transfer fee, and are there additional costs or franchisor approval requirements for transferring a franchise to a new owner?

Renewal conditions are only 2 (typical 6.0-8.0). What are these 2 conditions, and how easy is it for franchisees to meet them to secure renewal?

Item 19 (financial performance data) is not provided. Can you provide audited or compiled financial statements for median and average unit volumes for units in operation for at least 2 years?

What support and training does the $0 franchise fee include? How are training, site selection, initial marketing, and ongoing support funded without a franchise fee?

Given the 29 closures in 2025 alone, can you provide the names/locations of closed units and explain whether these were franchisor terminations, voluntary closures, or other circumstances?

The ad fund rate is 0% versus the typical 1.0-2.0%. How are national advertising, marketing, and brand promotion funded if franchisees are not contributing to an ad fund?

With 13 termination causes in the agreement (below the typical 14.0-19.25 range), what are the specific contractual grounds for franchisor termination, and how quickly can the franchisor terminate without cure periods?

The personal guarantee requirement and broad indemnification clause (franchisor-favorable legal terms) mean franchisees are personally liable for all franchise agreement provisions. What is the practical scope of this indemnification, and are there any limitations on franchisor claims?

Disputes require mandatory binding arbitration in Franklin County, Ohio with an 18-month statute of limitations. If you are located outside Ohio, how does this arbitration venue affect your ability to defend against franchisor claims or pursue grievances?

What is the current profitability status of existing franchisees? Can you provide references for franchisees who have been in the system for 1, 3, and 5+ years to discuss their actual financial performance and satisfaction?