The Seals

The franchise has grown 50% year-over-year with zero turnover—can you provide the Unit Franchise Agreement Exhibit or disclosure statements showing the historical unit counts and exit details for each unit by location and name?

Your disclosure indicates no litigation in the past 3 years, but given your rapid growth from 3 to 6 units, what disputes or complaints (if any) have been resolved outside formal litigation or arbitration?

The franchise agreement allows immediate termination for any of 16 non-curable defaults with no cure period—can you specify what these 16 defaults are and provide examples of situations that would trigger immediate termination?

Your minimum monthly gross billing requirement of $40,000 (beginning year 4) represents a significant financial obligation—what percentage of franchisees currently achieve this threshold, and what happens if a franchisee falls short?

The 2-year non-compete within 50 miles of any franchise location is quite broad—if The Seals expands into a territory near an existing franchisee after that franchisee's contract expires, does the outgoing franchisee remain bound by this restriction?

Post-term customer non-solicitation applies for 2 years—how does The Seals define 'customer' and how is compliance monitored after a franchisee exits?

All disputes must be resolved through binding arbitration in Orlando, Florida with class action waivers—what is the average cost and timeline for a typical franchisee dispute based on cases you've arbitrated?

The franchise fee is $49,000 with an additional $15,000 transfer fee—are there any other initial costs not listed (equipment, training, initial inventory, working capital requirements)?

Your Item 19 (financial performance representations) is not provided—does The Seals prepare Item 19 disclosures, and if so, why was this information not included in your standard FDD?

With only 6 franchisees in the system, can you confirm that all 6 current units are active, operational, and in good standing as of today's date?

The technology fee of $499 monthly is substantial—what specific products, systems, and services does this cover, and are franchisees locked into proprietary software with penalties for non-compliance?

Your franchise agreement requires purchases from The Seals or franchisor-approved suppliers only—what percentage of the franchisee's cost of goods does this represent, and how frequently are approved suppliers and pricing reviewed?

The franchisor retains the right to determine all prices for products and services—does this limit franchisees' ability to adjust pricing based on local market conditions, and are there any published pricing adjustment mechanisms?

Personal guarantees from all equity owners and their spouses are unlimited—what scenarios has this triggered, and are there examples where both spouses were held personally liable for a franchisee's breach?

You have 2 renewal options of 10 years each for a 30-year potential term—what is the renewal fee ($5,000 mentioned), and are there any conditions under which The Seals can decline renewal despite the franchisee's good standing?

Given zero exit data, can you disclose any unit performance ranges (top quartile vs. bottom quartile revenue/profitability) among your current 6 franchisees?

The 1.5% monthly interest rate (18% annually) on late payments is permitted in your state—what is the average number of days franchisees take to pay royalties and how many late-payment notices are issued annually?

Your dispute resolution requires arbitration with a jury trial waiver—if you pursue injunctive relief against a franchisee for non-compete violations, which arbitrator or judicial forum would you use, and what are the typical legal fees?

The franchise agreement allows The Seals to determine all product/service prices—what transparency exists regarding how prices are set, and are franchisees notified in advance of price increases?

With a small 6-unit system, how does The Seals provide ongoing support (training, marketing, operations, technology) to franchisees, and what are the documented support costs included in the 10% royalty rate?