The franchise fee of $50,000 is above the typical retail franchise range. What specific goods, equipment, training, or services are included in this fee that justify the above-market pricing?
#1
The transfer fee of $25,000 significantly exceeds typical retail franchise transfer fees. What justification is provided for this higher fee, and are there circumstances where it can be reduced or waived?
#2
Your gross sales figures ($1.9M median) are substantially higher than typical retail franchises. Can you provide detailed breakdowns of how much of this sales volume comes from furniture retail versus services, and what factors drive these above-average sales?
#3
Between 2020 and 2022, 4 units ceased operations. Can you provide specific details about the causes and circumstances of each closure, including whether any were related to management issues, market conditions, or franchisor support deficiencies?
#4
The contract requires binding arbitration with class action waivers and unlimited personal guarantees. How many franchisees have pursued arbitration in the past 5 years, and what were the outcomes?
#5
Your non-compete clause covers 2 years and 10 miles. Has the franchisor enforced this restriction against departing franchisees, and if so, what legal costs have franchisees incurred in defending against enforcement actions?
#6
The unlimited personal guarantee clause exposes franchisees to liability for all franchise obligations. Can you provide examples of circumstances where franchisees have been held personally liable, and what the typical cost of such liability has been?
#7
Your renewal fee is $1,000 but your initial term is 10 years with 5-year renewal options. What changes to royalty rates, fees, or operational requirements occur upon renewal?
#8
With 74 units in your system, how many new franchisees have you approved in the past 12 months, and how many inquiries resulted in rejection due to market saturation or franchisee qualifications?
#9
The contract requires disputes be arbitrated within 10 miles of your principal business location. Where is your principal business located, and does this requirement create an undue financial burden on franchisees in distant markets?
#10
Can you provide the Item 19 financial performance statement detailing how many units were included in the sales figures, the percentage of units achieving the stated averages, and a breakdown of operating expenses?
#11
Your bottom quartile units generate $1.2M in sales. What percentage of franchisees fall into this bottom quartile, and what factors distinguish them from average-performing units?
#12
In the 1 unit that was terminated by the franchisor in 2020, what were the specific grounds for termination and how long was the notice period provided?
#13
Are there any restrictions on franchisees selling merchandise or offering services outside the core Woodcraft product line, and if so, what percentage of revenue do top performers derive from ancillary services?
#14
The system showed stability with 74-75 units over 3 years. Is this by design (controlled growth) or does it reflect challenges in recruiting new franchisees? What are your growth targets for the next 3 years?
#15
Can you provide a list of 5-10 current and former franchisees (including contact information) that I can interview about their experience with the system, litigation risks, and support quality?
#16
What is your policy regarding territory encroachment if you open corporate-owned locations or authorize online sales within a franchisee's exclusive territory?
#17
Have any franchisees requested early termination or buyout options during the 10-year initial term, and if so, what terms were offered?
#18