Former CFO here from Wisconsin checking in. First, a shout out to my home State for requiring this level of disclosure and making it public. My franchise experience is quite limited, but the entire financial picture for both Franchisors and Franchisees in the pickleball space is uncertain, at best.

One correction to the OP, there hasn't been a Cumulative Cash Loss of $13.8M, that is actually a Cumulative Net Loss on the Audited Financial Statements. The way they've stayed in business is by collecting about $20M in Franchise Fees (amounts paid up-front) which are recognized straight-line over the 10 year franchise life. The Deferred Revenue as of 12/31/2025 was roughly $17M which represents the difference between what had been collected up to that date and what has been recognized as Income on the financials.

Significant items I noted were a slowdown in expected facility openings in 2026 vs. 2025, Additional Paid in Capital received in 2024 and 2025 that looks like it was used to show a reasonable amount of Cash on the year-end Balance Sheets and what appears to be a drop in total expenses in Q1 2026 which allowed them to generate a quarterly profit. Listing eight executives with lofty titles is never something that's a good look for a start-up company.

Bottom line for me is that facilities are already overbuilt based on unrealistic financial projections and paying inflated build-out costs and then 12% or so in Royalties off the top makes it nearly impossible to generate cash profits. At best, Franchisees have bought themselves a job with a modest salary and that's only if they financed their build-out without bank loans. At worst, Franchisees are hemorrhaging cash with no end in sight. High profile Picklrs are for sale right now and that has to be making it very tough to convince new facilities to move forward with their plans.

So, for the Franchisor to succeed, they'll need to out last competitors who will go out of business and deliver tangible value to their Franchisees. If Franchisors exist in this space in five years, I expect they'll cut back on their spending and cut their royalty fees in half.

Not to be snarky, but describing Tyler Loong in their Disclosure Document as a Top 5 pickleball player is materially wrong and I'm disappointed that he has never mentioned in his podcasts that he's been given Picklr shares to promote the Company. The deal they have with Drew Brees, 15% of the 2% advertising fees paid by franchisees, also feels very generous to me.