The termination rate of 3.8% is more than 3.5 times the typical range for this category. Can you provide details on the 2 terminations in 2024—what were the specific violations and cure periods offered?
#1
Why did the system experience 2 unit closures in 2024 after zero closures in 2023? Were these voluntary exits or linked to performance issues?
#2
The initial contract term is 5 years compared to the typical 10-15 years for this category. What is the rationale for the shorter initial term, and does it align with typical franchise standards?
#3
With a total potential term of only 10 years versus the typical 20-30 years, how does this short contract horizon affect long-term investment viability and unit value?
#4
Can you explain why the renewal conditions include 8 specified requirements, and what percentage of franchisees historically fail to meet these conditions?
#5
The technology fee of $30 monthly is substantially lower than the typical $110-$408. What specific technology services and support are included, and is this rate guaranteed to remain fixed?
#6
Regarding the 3 sole-approved supplier items (dough balls, logoed paper products, mountain cider), what are the mark-up percentages on these products, and has the franchisor ever changed suppliers?
#7
The franchise agreement classifies 19 of 22 default categories as non-curable with cure periods as short as 24 hours for trademark violations. How often have franchisees been terminated without opportunity to cure?
#8
Personal guarantees are required from all principals on a joint and several basis. Can you clarify whether this applies equally to married and unmarried franchisees, and what recourse exists if a spouse declines to sign?
#9
Item 19 is available—what do the actual financial performance metrics show for median and average gross sales, and how many units report this data?
#10
How are the 2 terminations in 2024 reflected in the disclosure documents, and what were the most common reasons for franchise exits in the past 3 years?
#11
The franchisor scored 79/100 for Support & Training, below the typical 90-100 range. What specific training and ongoing support are provided to franchisees, and how frequently?
#12
With a non-compete of 2 years/10 miles, what happens if a terminated franchisee operates a similar waffle concept outside the 10-mile radius after year 2?
#13
Can you provide a breakdown of the 4.8% annual turnover rate—what percentage is attributed to voluntary closures versus franchisor terminations?
#14
The Ongoing Fees score is 64, slightly above the typical 60-62 range. Beyond the stated royalty (5%), ad fund (2%), and technology fee ($30), are there any other recurring fees or mandatory product purchases?
#15
What is the historical trend for unit growth before 2022? The data shows growth to 57 units currently, but what was the system size 5-10 years ago?
#16
Regarding the renewal option, what percentage of franchisees historically renew their contracts, and have any franchisees been denied renewal due to failure to meet the 8 specified conditions?
#17
How is the $2,000 renewal fee calculated, and does it increase if the franchisee renews for additional terms?
#18
The transfer fee is $7,500—does this include franchisor approval processes, and what are the typical approval timelines and criteria?
#19
Have there been any regulatory actions, complaints to state franchise authorities, or class-action lawsuits filed against Waffle Cabin that are not reflected in litigation data?
#20