The ad fund rate of 5.0% is significantly higher than the typical range of 0.8-2.0% for automotive franchises. How is this ad fund allocated, and what specific marketing initiatives does it support at the franchisor versus local level?
#1
Your royalty rate of 8.0% exceeds the typical range of 5.4-7.5% for this category. What justifies this rate, and are there any circumstances under which franchisees can negotiate a lower rate based on performance or market conditions?
#2
The transfer fee of $18,000 is notably above the typical range of $4,500-$13,750. How is this fee calculated, and what services or review processes does it cover?
#3
Your contract term of 10 years is substantially shorter than the typical 15-30 year range for automotive franchises. How does the franchisor approach retention and unit stability given this shorter initial commitment period?
#4
Can you provide details on the 2 cases where the franchisor was named as defendant? What were the claims, outcomes, and have any changes been made to franchise policies or procedures as a result?
#5
What was the nature of the 1 case you initiated as plaintiff, and what was the outcome? Does this represent an ongoing pattern of enforcement actions against franchisees?
#6
With no closures recorded in 2022, what operational or support changes occurred between 2021 (2 closures) and 2022 that may have contributed to improved retention?
#7
The renewal fee equals 15% of the current franchise fee at renewal. For a new franchisee paying $36,000 today, what would the anticipated renewal fee be 10 years from now, and how is that figure estimated?
#8
Your franchise agreement requires personal guarantees and broad indemnification of the franchisor. Under what circumstances have franchisees been required to indemnify the franchisor, and what is the typical scope of claims?
#9
The territory is described as protected but not exclusive. Can you clarify what protection means, and what prevents the franchisor or other franchisees from opening competing locations nearby?
#10
Only 1 unit transfer occurred in 2022 despite 97 total units in the system. Do most departing franchisees simply close rather than sell their businesses, and if so, why?
#11
The non-compete clause restricts activity for 2 years within 15 miles. How strictly is this enforced, and what specific activities are prohibited beyond operating a competing Ziebart franchise?
#12
Average gross sales per unit are reported as $1,320,544. What percentage of existing franchisees achieve this average, and what is the median performance figure?
#13
What specific conditions must franchisees meet to qualify for renewal after 10 years, and how frequently are renewal applications denied?
#14
Has the franchisor experienced any regulatory actions, complaints to state agencies, or class action litigation beyond the 3 cases documented in FDD Item 3?
#15
Given the relatively short 10-year initial term, what long-term business planning strategies does the franchisor recommend to franchisees to protect their investments?
#16
The system grew from 93 to 97 units over 3 years despite 5 closures, 3 terminations, and 3 transfers. How many new units opened during this period, and what is the franchisor's growth strategy going forward?
#17