The Shade

The royalty rate of 8.0% exceeds the typical range of 6.0-7.0% for this category. What justifies this higher rate, and are there any performance bonuses or royalty reductions available?

The transfer fee of $25,000 is significantly above the typical range of $7,500-$20,000. What services and approvals are included in this transfer fee?

The franchise currently has zero units. When is the franchisor planning to open the first location, and what is the growth timeline?

Your financial performance score of 40/100 falls below the typical range of 53.0-60.0 for this category. Why has the franchisor not filed an Item 19 financial performance statement, and when will one be available?

The transfer fee of $25,000 is a significant expense. Are there any circumstances under which this fee can be waived or reduced, such as for transfers to family members?

The agreement includes 20 non-curable defaults allowing immediate termination. Can you provide a complete list of these non-curable defaults, and what specific actions would trigger termination?

The non-compete clause is 2 years within 25 miles of the franchisee's territory or any other Shade outlet. Given the franchise has zero units currently, how will the '25 miles of any other Shade outlet location' be measured if the system grows?

Personal guarantees are required from both the franchisee and spouse. Are there any circumstances where this requirement can be modified, or are guarantees waivable after a certain performance period?

Franchisees must purchase all or nearly all inventory and supplies from the franchisor or designated suppliers. What are the specific categories, pricing structures, and markup percentages for these mandatory purchases?

Late payments incur a $100 flat fee plus 1.5% monthly interest (18% annually). Are these penalty terms negotiable, or are they fixed in all franchise agreements?

The agreement requires franchisees to join a specific entity or program with minimum payments regardless of sales levels. What is this entity, what are the mandatory payments, and can franchisees opt out?

Renewal is subject to 7 conditions including required remodeling and repairs. What are the estimated costs for required remodeling, and who determines the remodeling standards and timeline?

Given zero litigation cases historically, how many franchisees has the franchisor had, and over what time period? If there have been any franchise agreements signed, what happened to those franchises?

The ongoing fees score of 58/100 is below the typical range of 62.0. What is the total annual fee burden as a percentage of expected gross sales, assuming an average unit's annual revenue?

The territory is exclusive with encroachment protection. Does the franchise agreement define specific geographic boundaries for the exclusive territory, or is it defined flexibly based on franchisor discretion?

What support and training are provided to franchisees, and what are the associated costs? Are these included in the franchise fee or charged separately?

The initial term is 10 years with 2 renewal options of 5 years each. Are there any performance requirements or financial thresholds that must be met to qualify for renewal?

Has the franchisor operated company-owned units or pilot locations? If so, what were the financial results, and what operational challenges were encountered?

The investment cost score is 73/100, slightly below the typical range of 74.0-75.0. What is the total estimated investment required to open a franchise location, including all fees, inventory, and buildout costs?

How many prospective franchisees has the franchisor contacted or signed non-disclosure agreements with, and at what stage is the franchise development process?