Velofix

The 1-year turnover rate of 50% is substantially higher than the category average of 1.0-6.8%. Can you provide details on the primary reasons franchisees are exiting (e.g., profitability, market saturation, operational challenges)?

Unit count declined from 94 to 74 over 3 years with 50 closures in 2022 alone. What specific business or market factors contributed to this mass closure event?

With zero franchise transfers in the current year and only 2 transfers over 3 years, why is the transfer rate (0.0%) significantly below the category average of 0.6-5.6%? Are franchisees unable to find buyers?

The royalty rate of 8.0% exceeds the category typical range of 5.4-7.5%. How does this higher royalty impact franchisee profitability compared to competitors in the mobile bike repair space?

The initial term of 5 years is notably shorter than the category typical range of 10-15 years. How does the franchisor address business stability and long-term planning with this shorter initial commitment?

The contract includes 25 termination causes, above the typical range of 13-18. Can you provide the full list and clarify which are most commonly cited in actual terminations?

The contract requires franchisees to operate an additional mobile unit when gross sales exceed $200,000. How many franchisees currently operate multiple units, and what is the historical impact of this mandatory expansion requirement on franchisee success?

Late payment interest is set at 18% per annum. Given the high exit rate, have payment defaults been a contributing factor to franchise closures or terminations?

The non-renewal rate is 4.1% annually. What are the primary reasons franchisees choose not to renew, and do they cite operational or financial challenges?

With a 2-year, 10-mile non-compete clause, how many former franchisees have competed with the system, and has this been enforced?

The renewal fee is capped at $7,500. Given the 5-year initial term, what capital or facility improvements does the franchisor require at renewal to remain competitive?

Item 19 (financial performance data) is not available. Can the franchisor provide median or average unit volumes (AUV) and gross profit margins for operating units to assess unit economics?

What percentage of current 74 units are profitable, and what is the average payback period for the initial $35,000 franchise fee investment?

Personal guarantees are unlimited in scope and include spouses. Can you clarify what specific obligations spouses are responsible for if an individual franchisee defaults?

Franchisees must purchase from designated or approved suppliers across 5 categories. What is the markup or margin the franchisor receives from these supplier relationships?

The franchisor can specify retail prices and establish minimums and maximums. How frequently are these price controls adjusted, and do they conflict with local market conditions?

Are there any pending or threatened litigation cases not disclosed in the FDD that prospective franchisees should be aware of?

Given the 50% 1-year turnover rate, what support, training, or operational improvements has the franchisor implemented in the past 12 months to improve franchisee retention?

For the 4 units that closed in 2024 and 1 that was terminated, can you provide the specific circumstances (e.g., location performance, franchisee decision, franchisor action)?

What is the geographic distribution of remaining 74 units, and are there market saturation or cannibalization issues in specific regions contributing to exits?