Given the franchise fee of $38,500 is below market for this category, what services or support justify the lower entry cost compared to competitors charging $40,000-$55,000?
#1
Your median gross sales of $58,118 is significantly lower than peers ($220,751-$932,159). What factors explain this gap, and what is the realistic revenue range for a new franchisee in year one and year three?
#2
Can you provide a detailed breakdown of how the average gross sales figure of $111,612 is calculated? How many units reported this data, and what is the range of performance across your franchise network?
#3
Your system grew 75% in the past year (from 12 to 21 units). What is driving this rapid expansion, and is this growth rate sustainable given the lower sales performance per unit?
#4
The contract term is 10 years total with no renewal options mentioned. Can you clarify the renewal terms and whether franchisees have any pathway to extend beyond the initial 10 years?
#5
Your non-compete radius of 50 miles is double the typical 10-25 miles for this category. How does this affect a franchisee's ability to operate other businesses or relocate after franchise exit?
#6
With zero litigation over 3 years and no reported terminations or transfers, can you explain what the 14 termination causes in the agreement cover, and what percentage of franchisees have triggered any of these clauses?
#7
The contract includes only 5 renewal conditions versus the typical 6-9. What are these conditions, and what happens if a franchisee fails to meet them at the end of year 10?
#8
What specific support and training does the franchisor provide to help units achieve profitability, given the reported sales figures are well below category averages?
#9
Can you provide the Item 19 financial performance data you reference, including the number of responding units, operating expenses, profit margins, and how long units typically take to break even?
#10
Are there any pending disputes, complaints filed with state regulators, or informal franchisee grievances that are not reflected in the litigation data?
#11
The technology fee is $150 monthly. What technology systems and tools does this cover, and are there additional technology costs not included in this fee?
#12
Given the rapid growth (75% year-over-year), how is the franchisor scaling support staff, training capacity, and quality control to maintain service standards?
#13
What percentage of your current 21 units are company-operated versus franchisee-owned? How long have the oldest units been operating?
#14
Can you provide specific examples of the 5 curable defaults and the 9 non-curable defaults mentioned in the termination clause, and under what circumstances each is typically invoked?
#15
The 2-year, 50-mile non-compete is substantial. Can you clarify whether this applies only to computer coding classes or extends to all educational services, and whether it applies to the franchisee personally and/or to any business entities they own?
#16
What is your current franchisee satisfaction rate, and do you conduct regular surveys or have an advisory council? Can you provide references from existing franchisees in similar markets?
#17
What happens to a franchisee's exclusive territory if their location underperforms, and under what circumstances can the franchisor modify or rescind territory protections?
#18
How many units have used the transfer option, and what is the typical timeline and approval process for transferring a franchise to a new operator?
#19
What specific costs and obligations are franchisees responsible for regarding training, marketing, staffing, and facility operations that are not included in the initial $38,500 franchise fee?
#20