Zerorez

Can you provide details on the 18 units that closed in 2022? Were these closures due to market conditions, franchisee performance issues, or other specific factors?

What explains the 17 units marked as 'ceased for other reasons' in 2022? What types of circumstances fall into this category?

Of the 2 litigation cases filed in the past 3 years, what were the allegations and outcomes? How was the case where the franchisor was plaintiff resolved?

What is the status of the 1 pending litigation case? What are the allegations and potential impact on the system?

Given the turnover rate of 24.3% over 3 years significantly exceeds typical rates, what is the franchisor's analysis of why franchisees are exiting at higher rates?

How many units are currently operating below the 'revenue per person ratios' development obligations outlined in Schedule A? What are the consequences for underperforming units?

Can you explain the disparity between the system's strong financial performance (median $877,874 gross sales) and the high exit rate? Are higher-performing units more likely to remain?

The non-compete clause is limited to 1 year, compared to the 2-year typical range. Why did the franchisor choose a shorter restriction period, and how does this affect franchisee mobility?

What is the franchisee's responsibility if a unit fails to meet revenue per person ratio obligations? Does this trigger termination, or are there remediation options?

The technology fee of $110/month is substantially below the typical range of $130-$500. What services and technology are included in this fee, and are there limitations on functionality or support?

Can you clarify what restrictions apply during the 18-month post-termination non-compete period? Are franchisees prohibited from working in floor and fabric care in bordering states even if opening a different type of cleaning business?

How is the 2% late payment penalty and 24% annual interest on royalties calculated? If a franchisee is 30 days late, is interest compounded monthly or annually?

Are there examples of franchisees who have successfully renewed their contracts after the initial 10-year term? What percentage of franchisees typically opt for renewal?

The exclusive territory protection is a strength (100/100 score), but how is territory defined? Are territories protected by zip code, radius, or geographic boundary?

Have there been any encroachment disputes or customer competition issues between franchisees in neighboring territories?

What support does the franchisor provide to franchisees who are underperforming relative to revenue per person targets? Is there a formal remediation or coaching program?

Can you provide a breakdown of the 3 unit closures in 2024? Were any franchisor-initiated or due to failure to meet obligations?

What is the typical franchise unit AUV (average unit volume) by year of operation? How do Year 1 units compare to mature units in terms of revenue?