Given the 19.8% decline in units over the past year, what specific factors does the franchisor attribute to recent closures and non-renewals?
#1
Can you provide detailed financial performance data (Item 19) showing average unit volumes for operating locations, as this is not currently disclosed?
#2
What support or intervention programs has the franchisor implemented to address the 28% annual exit rate, and what results have these initiatives produced?
#3
The non-renewal rate is 11.7%—what are the primary reasons franchisees cite for choosing not to renew at the end of their terms?
#4
With a System Health score of 0/100, what specific operational or governance issues have been identified, and what remediation efforts are underway?
#5
Why is the monthly technology fee of $100 set significantly below the category average of $110-$408, and are there planned increases?
#6
The non-compete radius of 1 mile is substantially below the typical 5-10 mile range—how does this protect your investment from nearby competitive units?
#7
What is the actual total of all ongoing fees (royalty, ad fund, technology) as a percentage of gross sales, and how does this compare to competitors?
#8
Of the 42 units that closed in 2024, how many were franchisor-initiated terminations versus voluntary closures or non-renewals?
#9
Can you explain the difference between 'Ceased Other' category (22 units in 2024) and standard closures, and how this affects remaining franchisees?
#10
The franchise has only 150 units remaining—what is the minimum viable system size for profitable franchisor operations, and are you approaching that threshold?
#11
Given the decline from 262 to 150 units over 3 years, what is the franchisor's growth strategy and realistic unit projections for the next 3-5 years?
#12
With 12 termination causes in the franchise agreement (below the typical 15-20), what specific franchisee defaults trigger termination without a cure period?
#13
The transfer fee is $10,000 and renewal fee is $15,000—are these fees refundable if the franchisor declines renewal, or if you request a transfer that is denied?
#14
What mandatory renovations are required at renewal, what is the estimated cost, and can this be negotiated?
#15
Since territory is non-exclusive with no encroachment protection, has the franchisor opened units that directly compete with existing franchisees, and if so, how many?
#16
Can you provide case studies of the 11 units transferred in 2024 to understand whether transfers typically go to new franchisees or are absorbed by the franchisor?
#17
The dispute resolution clause mandates binding arbitration—how many disputes have been arbitrated in the past 3 years, and what were the outcomes?
#18
What are the personal guarantee requirements for owners and spouses, and are these standard or negotiable in the franchise agreement?
#19
In which 9 categories am I required to purchase from designated franchisor-approved sources, and what is the markup or price premium versus open-market options?
#20