The royalty rate of 6.5% is above the typical range for food and beverage franchises (5.0-6.0%). How is this higher rate justified, and what specific additional support or services does it fund compared to competitors?
#1
Why does the system currently show zero units across all years (2022-2024)? Is this a newly launched franchise, and if so, what is the timeline for opening the first franchised location?
#2
The renewal conditions require a full remodel to current standards without cost caps. What is the estimated cost range for this mandatory remodel, and can you provide examples of actual remodel expenses from any existing locations?
#3
Personal guarantees are required from owners with spousal consent needed for married guarantors. What specific obligations are covered under this unlimited personal guarantee, and are there any circumstances where the guarantee could be released?
#4
The Ongoing Fees score of 61 is below the typical range of 62.0. What factors contributed to this below-average score, and are there any hidden or variable fees not reflected in the royalty and ad fund rates?
#5
Can you provide details on the approved supplier list and explain how supplier pricing is controlled or negotiated? Are there opportunities for franchisees to negotiate volume discounts?
#6
What happens if a franchisee fails to meet the conditions for renewal after 10 years? Are there any dispute resolution processes, and what is the typical outcome for renewal denials?
#7
Since there are currently zero franchised units, how will you provide ongoing support and training? Do you have operational experience from company-owned locations, and if so, how many?
#8
The Investment Costs score of 83 is above the typical range. What are the complete startup costs beyond the $40,000 franchise fee, including buildout, equipment, initial inventory, and working capital?
#9
Are there any performance requirements or minimum sales thresholds that must be met during the initial term to qualify for renewal, and what happens if these are not met?
#10
The non-compete clause is 2 years and 5 miles. Does this apply after voluntary exit only, or also after termination by the franchisor? Are there any exceptions for different types of competing businesses?
#11
What is the transfer fee of $15,000 intended to cover, and what is the franchisor's process and criteria for approving unit transfers?
#12
Can you provide the complete Franchise Disclosure Document (FDD) Item 19 financial performance representations if available, or explain why Item 19 is not included?
#13
Given the zero current units, what is your plan to recruit initial franchisees and what marketing support will be provided during the launch phase?
#14
Are there any territorial disputes or encroachment policies you can clarify in writing? How will the franchisor handle situations where customer demand might justify multiple units in close proximity?
#15
The $20,000 renewal fee is non-refundable. Under what circumstances might a franchisee lose this fee, and is there a deadline before the contract expiration date when renewal decisions must be made?
#16
What proprietary products must be purchased from company-specified suppliers, what is the markup structure, and can you provide a cost breakdown compared to purchasing similar products from alternative suppliers?
#17
How does the company control pricing policies for franchisees, and can pricing be modified unilaterally by the franchisor during the contract term? What recourse do franchisees have if pricing changes negatively impact profitability?
#18