The technology fee of $700 monthly exceeds the typical automotive franchise range by over 40%. What specific technology services and software are included in this fee, and how often are these systems updated?
#1
Your advertising fund rate of 6.0% is 3 times the typical range for automotive franchises. How is this fund allocated between national advertising, local marketing support, and digital initiatives, and can you provide 3 years of marketing spend documentation?
#2
Transfer fees of $24,975 are nearly double the typical range. What services are included in this transfer fee, and are there circumstances under which this fee is waived or reduced?
#3
Your system transferred 21 units in 2024 (15.1% of the system), which is significantly above typical rates. What are the primary reasons franchisees are transferring ownership, and what screening process is applied to incoming transferees?
#4
With a 3-year compound annual growth rate of 18.3%, can you detail the specific strategies driving expansion and whether this growth is from new franchisee recruitment, multi-unit development, or company-owned unit conversions?
#5
The franchise agreement requires a $500 minimum weekly royalty regardless of sales performance. How does this minimum royalty impact franchisees with lower seasonal sales periods, and what percentage of units pay the minimum versus percentage-based royalties?
#6
One litigation case involved the franchisor as a defendant. What was the nature of this case, what was the outcome, and have any policy changes been implemented as a result?
#7
Your renewal fee of $12,488 combined with a 15-year renewal term is substantially longer than industry standards. What improvements or facility upgrades are typically required prior to renewal, and what is the historical renewal rate for franchisees approaching the end of their initial terms?
#8
The non-compete clause restricts former franchisees for 2 years within 20 miles. Has this been enforced in practice, and are there any pending or settled disputes related to non-compete violations?
#9
You require franchisees to purchase from 6 categories of approved suppliers with franchisor pricing authority. What is the franchisor's markup or profit margin on supplied products, and can franchisees request supplier alternatives for competitive pricing?
#10
Personal guarantees are required from all owners on a joint and several basis. In cases of partnership or multi-owner structures, how are personal guarantees enforced if one owner becomes insolvent or wants to exit?
#11
Top quartile sales of $1,066,581 are notably lower than typical for your category. What factors explain this variance, and what is the sales performance of the lowest quartile units?
#12
Item 19 financial data is provided, but the disclosure specifies 'units reporting' is not listed. How many of your 139 current units voluntarily reported financial performance data, and does this sample represent all unit types and territories?
#13
With a 10.3% net unit growth rate significantly above the typical range, what is the franchisee investment payback period, and what percentage of franchisees achieve profitability within the first 3 years of operation?
#14
The franchise agreement permits the franchisor to designate pricing for approved supplier products. What safeguards prevent arbitrary or excessive pricing increases, and how frequently have supplier pricing terms been modified since the system's inception?
#15
No terminations have been recorded for non-renewal, yet only 0.7% of units are terminated annually. What conditions most commonly trigger franchisor terminations, and how many franchisees have failed to renew at term-end over the past 5 years?
#16
Your territory protection score of 100 is above the typical range. Does exclusive territory protection apply in all markets, or are there exceptions in high-density areas, and what is the process for handling encroachment disputes?
#17
Interest charges on late royalty payments are set at 18% per annum. What is the historical frequency of late payments, and are there graduated payment plans or late fee waivers available for franchisees experiencing temporary cash flow difficulties?
#18