Tropical Smoothie Cafe

The advertising fund rate of 5.0% exceeds the typical range for quick service restaurants. How is this fund allocated, and what specific marketing initiatives and return on investment can you document for franchisees?

Can you provide detailed information about the single litigation case filed against the franchisor, including the nature of the claim, resolution, and current status?

Unit closures increased from 7 in 2022 to 18 in 2024. Can you break down the reasons for these closures by year and identify whether any locations were in specific underperforming geographic areas?

The franchise shows strong 1-year net growth of 10.4%, exceeding the category average. Is this growth primarily from new unit sales, transfers of existing units, or both?

What support and resources does the franchisor provide to address the 5.2% annual transfer rate, and how does the $10,000 transfer fee compare to the cost of recruiting a new franchisee?

Your renewal conditions count of 6 is below the typical range of 7-9 for quick service restaurants. What conditions must franchisees meet to qualify for renewal, and are any conditions discretionary or subjective?

The agreement includes termination for 16 non-curable defaults with immediate termination rights. Can you provide a detailed list of these 16 non-curable defaults and examples of how they have been applied in actual franchisee situations?

The operational control clause requires purchasing from approved suppliers in 6 categories. Which product and service categories are subject to supplier restrictions, and what is the estimated percentage of cost of goods sold affected by these requirements?

All current and future owners must provide personal guarantees. Are spouses required to guarantee the agreement, and what are the implications if a franchisee wishes to transition ownership?

The franchise fee is $35,000 with a total potential term of 25 years. How many franchisees have successfully renewed their franchises since the program began, and what percentage of original franchisees remain in the system?

Item 19 financial performance data shows median gross sales of $954,743. What is the median net profit or EBITDA, and what percentage of franchisees meet or exceed the median gross sales figure?

The non-compete clause is 2 years and 5 miles. How has this been enforced historically, and what is the franchisor's position on franchisees opening competing concepts within the restricted territory after exit?

Territory is protected but not exclusive. What specific encroachment protections are provided, and can the franchisor open or license additional Tropical Smoothie Cafe units or competing brands within my territory?

The franchise agreement allows the franchisor to control both maximum and minimum pricing. How frequently are pricing mandates issued, and can franchisees request pricing flexibility based on local market conditions?

Cure periods range from 10 to 30 days depending on the default type. Can you provide specific examples of defaults that fall into each cure period category?

The renewal fee is $0. Are there other fees or costs associated with renewal beyond the renewal conditions that franchisees should anticipate?

System growth of 10.4% in year 1 is strong, but closures also increased to 18 units in 2024. What is the franchisor doing to ensure sustainable unit growth and address the closure trend?

What percentage of franchisees are current on royalty and ad fund payments, and how does the franchisor communicate or enforce compliance with fee obligations?

Can you provide references from franchisees who have exited the system in the past 2 years, including details about their experience, reasons for departure, and relationship with the franchisor post-exit?