Water Babies

Can you explain the rationale for the technology fee of $500 monthly, which exceeds the typical range for childcare franchises by over $25/month, and what specific services and tools this covers?

Why is the royalty rate set at 10.0% when the typical range for childcare franchises is 7.0-8.0%, and is this rate negotiable for multi-unit operators or early adopters?

The non-compete clause restricts operation within 100 miles for 2 years post-exit—can you clarify how this is enforced and whether it applies to all types of aquatic instruction or only direct water survival competitors?

You currently have 2 franchise units. What is your growth strategy for the next 3-5 years, and do you have a pipeline of approved franchisees in development?

What support and training does the $500 monthly technology fee include, and are there opportunities to opt out or reduce this cost if franchisees use their own systems?

Can you provide details on the 7 renewal conditions mentioned in the franchise agreement, particularly regarding required system upgrades and their estimated costs?

The franchise agreement requires purchases from franchisor or approved suppliers across 8 product categories—can you provide a detailed breakdown of these categories and typical annual supply costs for a single unit?

What is the 10% renewal fee based on the 'then-current' initial franchise fee, and how has this fee historically increased for renewals of existing franchisees?

The arbitration clause specifies Southern Pines, North Carolina as the sole venue. If a dispute arises while operating in another state, would arbitration still occur in North Carolina, and what are the typical costs?

Given the personal guarantee requirement for individuals owning 5% or greater, what happens if a spouse or domestic partner later becomes involved in the business after franchise signing?

There is no minimum royalty for the first 12 months, but minimum royalties begin in month 31. What is the minimum royalty amount, and how is it calculated relative to gross sales?

Can you provide references from all current franchisees, including their profitability, retention experiences, and any challenges they've encountered with the fee structure or operational requirements?

Item 19 financial performance data is available—can you clarify whether this data reflects all 2 current units or only units that have been open for a full year, and what the range of revenues has been?

What is included in the franchisor's right to set maximum resale prices for franchisee products and services, and how often have these price caps been adjusted?

The transfer fee is $15,000. If a franchisee wishes to sell the business after 5 years, what additional approval conditions exist beyond the transfer fee, and what is the franchisor's approval timeline?

How does the franchisor handle encroachment complaints if another operator begins offering water survival instruction services to babies in or near an existing franchisee's exclusive territory?

Are there any pending or settled litigation cases involving current or former franchisees that are not reflected in the 3-year litigation summary, and if so, what were the outcomes?

What training programs does the franchisee receive prior to opening, what is the duration, and are there ongoing training requirements tied to the monthly $500 technology fee?

If a franchisee fails to meet profitability targets or compliance standards, what is the typical remediation timeline before termination is considered?

Can you provide a detailed 5-year cost projection that includes all franchise fees, royalties, technology fees, required supply purchases, and renewal costs to help evaluate true return on the $55,000 initial investment?