WOW 1 DAY PAINTING

The ad fund rate of 5.0% is nearly 2.5 times higher than the typical range of 1.0-2.0% for home service franchises. What specific marketing initiatives and national campaigns does this fund support, and how is fund performance measured?

Can you provide detailed explanations for each of the 11 unit closures in 2024? What were the primary reasons cited by franchisees (operational challenges, profitability, market conditions, competition, etc.)?

The closure rate of 23.9% in the past year significantly exceeds the typical range of 1.1-12.43%. Are you aware of systemic issues affecting unit profitability, and what operational changes are planned to improve retention?

Average gross sales of $382,380 fall below typical benchmarks for this franchise category. What percentage of franchisees achieve profitability, and what is the average net profit after all expenses including royalties and ad fund?

The initial term of 5 years is half the typical 10-year term for home service franchises. Why was a shorter term chosen, and what happens if a franchisee wants to continue beyond the initial 5 years but renewal terms change?

The non-compete restriction of 1 year is half the typical 2-year period. Can franchisees operate a competing painting business immediately after exit, and what specific activities are actually restricted during that 1-year period?

The franchise fee of $40,000 is below typical for this category. What is included in this fee, and are there additional startup costs not disclosed in Item 5 that franchisees should anticipate (equipment, insurance, working capital, etc.)?

Item 19 financial data is provided. What percentage of units reported in this Item 19, and how many units failed to report or were excluded? Are closures included in the financial performance data?

You have been both plaintiff and defendant in litigation cases historically. What was the nature of the case(s) involving litigation, and have settlement terms or judgments been satisfied?

Can you provide a breakdown of the 11 closures in 2024 by franchisee tenure? Were these primarily new franchisees (first 1-3 years) or established units, and does this pattern suggest a training or support issue?

The Risk Factors score of 44 is significantly below the typical range of 58.0-76.0 for home service franchises. What specific risk factors contributed to this low score, and what mitigation strategies are in place?

The renewal fee is $15,000 with a 5-year renewal term. Are renewal terms negotiable, and what happens to the territory if a franchisee declines renewal—can a new franchisee be awarded the same area?

The franchise agreement includes 15 non-curable defaults and cross-default provisions. Can you provide a list of these 15 non-curable defaults, and are there circumstances where they can be waived?

Binding arbitration is required in King County, Washington, and class action waivers are included. If multiple franchisees experience the same franchisor breach or misrepresentation, how can they collectively pursue remedies?

Personal guarantees from all owners and spouse consent are required. In the event of a dispute between the franchisee and franchisor, are the spouse's personal assets at risk for franchisee obligations?

Mandatory purchases from approved suppliers are required for 8 categories including paint and vehicles. How are suppliers approved, can franchisees request alternative suppliers, and what recourse exists if supplier quality or pricing becomes uncompetitive?

A 5% late payment penalty applies to royalties. Given the high exit rate, do you track payment delinquency data, and what percentage of current franchisees are current on all payments?

The franchise agreement allows 15 days to cure payment defaults but 30 days for other defaults. How is this interpreted in practice, and what written notice procedures must be followed before termination rights are triggered?

The system grew 9.8% net in the past year (from 51 to 56 units) while losing 11 units to closure and gaining 16 new units. What is the recruitment and approval process for new franchisees, and how does the franchisor ensure qualified candidates given the high historical closure rate?