Your royalty rate of 5.0% is notably lower than the typical 6.0-7.0% range for home services franchises. What specific support and services are included to justify this below-market rate, and do you anticipate adjusting this rate in future franchise agreements?
#1
The monthly technology fee of $750 significantly exceeds the typical range of $156.50-$599.00. What specific technology platforms and tools are included in this fee, and is there a breakdown of what comprises this cost?
#2
Your system has grown 58.82% in one year (from 17 to 27 units) with a 65.1% three-year CAGR, far exceeding typical growth rates. What is driving this rapid expansion, and do you have projections for the next 3-5 years?
#3
Average gross sales of $374,994 fall significantly below the typical range of $424,333-$1,214,622. Can you provide context on whether this reflects units still ramping up, regional market variations, or other factors? What is the median time to profitability for new franchisees?
#4
Your non-compete restriction of 50 miles exceeds the typical range of 25-40 miles. What is the rationale for this extended geographic restriction, and how aggressively do you enforce it in practice?
#5
The transfer rate of 7.4% is above the typical range, with 2 transfers occurring in 2024 alone. What are the primary reasons franchisees are transferring units, and what percentage are these transfers to family members versus third parties?
#6
You require personal guarantees from all 5%+ stakeholders and spousal guarantees for all financial obligations. How often have you enforced these guarantees in disputes, and what percentage of franchisees have had to pay personal liabilities beyond the franchisee entity?
#7
Your dispute resolution clause mandates binding arbitration at your principal business location. What are the average costs and timelines for arbitration cases, and have any franchisees challenged this clause regarding venue fairness?
#8
You identify 15 non-curable defaults in your franchise agreement. Can you provide the specific list of these defaults, and how many franchisees have been terminated for non-curable defaults versus curable ones in the past 3 years?
#9
The cure period for certain defaults is as brief as 5 days. For which specific defaults is this 5-day period applied, and do you consider this timeframe reasonable given typical business operations?
#10
Post-termination, franchisees cannot operate any competitive business for 2 years within 50 miles. How do you define 'competitive business,' and have there been disputes over whether specific activities violate this restriction?
#11
Despite rapid unit growth and no litigation in 3 years, you have a termination rate of 3.7% in the past year. What triggered the termination in 2024, and what are the typical reasons for the terminations you've executed?
#12
Item 19 financial performance data is available—specifically for how many units and years? Are the average sales figures ($374,994) based on all operating units or a subset, and what percentage of units exceed versus fall below these averages?
#13
Your franchise agreement requires 10-year initial terms with one 10-year renewal option. What are the typical renewal terms, and have any franchisees chosen not to renew? What are the reasons given?
#14
You charge a $5,000 renewal fee and $10,000 transfer fee. Are these fees fixed regardless of circumstances, and are there any other fees or increases applied at renewal or transfer?
#15
System Health scores 75, above the typical 50-70 range. What specific metrics or operational strengths are contributing to this above-average score, and how do you measure system health?
#16
Given your rapid growth from 6 units (3 years ago) to 27 units (current), what training and support infrastructure have you scaled to accommodate franchisees, and are there any growing pains or support gaps reported?
#17
The 2024 data shows 1 termination and 2 transfers. Can you detail whether the termination was franchisor-initiated, franchisee-requested, or mutual, and the reasons behind each transfer?
#18
What is your preferred method for resolving franchise disputes before escalating to mandatory arbitration, and what percentage of disputes are resolved informally versus through arbitration?
#19