TPTEA

The franchise fee of $50,000 exceeds the typical range for this category. What specific value or services justify this above-average fee compared to competitors?

Can you provide details on the single litigation case initiated against the franchisor? What was the nature of the dispute and how was it resolved?

Your system has grown at 33.3% annually (38.7% CAGR over 3 years), well above typical growth rates. What is driving this rapid expansion and is this growth sustainable?

The initial contract term is 6 years, below the typical 7.75-10.0 year range. Why was a shorter initial term chosen, and what factors should franchisees consider with a shorter commitment period?

Renewal options show only 3 conditions compared to the typical 7-9 conditions. What specific conditions will determine renewal eligibility, and how does the franchisor's grading system (A/B/C grades) function?

The total potential contract term is 6 years with no extension beyond the initial term. Can you clarify the renewal structure and whether Grade A franchisees truly cannot renew beyond their initial term?

The transfer clause completely prohibits transfers with no right of first refusal. How does this restriction apply if a franchisee's circumstances change, and what options exist for exit besides termination?

Renewal rights depend on the franchisor's sole discretion and a performance grading system. Can you provide the specific criteria for Grade A, B, and C classifications and the percentage of franchisees in each grade?

The franchise agreement requires a $50,000 cash security deposit as a personal guarantee. Is this deposit held in escrow, does it earn interest, and under what circumstances would it be forfeited?

Franchisees must purchase from the franchisor or franchisor-approved suppliers. What is the typical markup on franchisor-supplied products compared to independent market alternatives?

Minimum performance requires maintaining a 75-point regional operational evaluation score for territory protection. How frequently are evaluations conducted and what specific metrics comprise this scoring system?

Late payments incur 16% annual interest. Is this standard for all late payments, and are there any grace periods or escalating penalty structures?

The non-compete clause lasts 2 years after termination. Does this apply to all types of beverage businesses or only direct competitors, and how is compliance monitored?

With zero terminations and zero transfers in the past 3 years, can you identify any franchisees who exited voluntarily and their stated reasons for leaving?

The 1-year franchise fee of $50,000 and ongoing royalties (6% + 3%) represent significant financial commitments. What is the average unit volume (AUV) or typical revenue range that franchisees can expect in their first 3 years?

Are there any franchisees currently operating below the 75-point minimum performance threshold, and what are the consequences for territory protection and renewal eligibility?

Spouse and family member guarantees are required from shareholders. What is the scope of this personal liability, and can it extend to personal assets beyond the security deposit?

The audit and inspection rights allow franchisor access during normal business hours. Are there limits to frequency and scope, and what typically triggers an inspection?

With the termination causes count at 12 versus the typical 15-20, which standard termination grounds (e.g., non-payment, health violations, unauthorized changes) are NOT included in your agreement?

The rapid 33.3% 1-year growth from 12 to 16 units contrasts with the 6-year initial term and limited renewal options. What retention rate do you expect beyond the initial term?