What is the explanation for the significant discrepancy between the litigation activity (10 total cases, 7 in the past 3 years) and the minimal franchise unit base (only 1 current unit)? What were the primary claims in these 7 recent cases?
#1
Can you provide details on the 3 cases where the franchisor was plaintiff? What were the circumstances and outcomes, and how do they inform current franchisor-franchisee relationships?
#2
The system shows only 1 unit currently, 1 unit 3 years ago, and zero growth. What is the franchisor's current growth strategy, and are there signed agreements or commitments for new franchise openings?
#3
Given the average gross sales of $1,129,822 significantly exceeds typical franchises in this category, what specific operational factors or market conditions drive these sales levels? Are these sales attributable to the single franchisee or aggregated from previous units?
#4
The non-compete clause specifies 2 years and 25 miles. What is the franchisor's enforcement history regarding non-competes, particularly given the active litigation history?
#5
Why are there only 2 renewal conditions specified when typical real estate service franchises have 5-8 conditions? What renewal requirements would apply at the end of the 10-year term?
#6
The franchise agreement requires all disputes to undergo 60-day mediation in Virginia Beach before binding arbitration. What is the typical cost of mediation and arbitration under this franchise, and how often have disputes proceeded beyond mediation?
#7
Personal guarantees are required from all signing individuals. In the 7 cases where the franchisor was defendant, were personal guarantees enforced against individual franchisees? What were the outcomes?
#8
What is the current status of the 1 pending litigation case? What is the claim, and when is a resolution expected?
#9
The technology fee of $50/month is below typical range. What specific technology services and support are included in this fee, and is there a cap on potential increases?
#10
With only 1 current franchise unit, what support infrastructure (training, marketing, field support, legal compliance) exists to support new franchisees? Are support services scalable?
#11
Has the franchisor experienced any regulatory action, complaints with the FTC, or state franchise authority investigations related to disclosure or compliance issues?
#12
The royalty rate of 5.0% is below typical. Is this rate guaranteed to remain fixed, or could it increase in future renewals or amendments to the franchise agreement?
#13
Given the 10-year term with no specified renewal options, what happens at the end of the initial term? Can franchisees request renewal, and on what terms?
#14
Territory is non-exclusive. Can the franchisor open competing company-owned locations or sell additional franchises in the same territory where you operate?
#15
The franchise fee is $35,000 with a $5,000 transfer fee. Are there other costs to transfer a franchise to a buyer, or could the franchisor impose conditions that effectively prevent transfer?
#16
What are the 11 specific causes for termination listed in the agreement? Which causes are triggered by objective performance metrics versus subjective franchisor discretion?
#17
In the 7 cases where the franchisor was defendant, were any judgments rendered against the franchisor? What were the amounts and nature of the claims?
#18