  We have obtained deep Hubble Space Telescope (HST) imaging of 19 dwarf galaxy
candidates in the vicinity of M101. Advanced Camera for Surveys HST photometry
for 2 of these objects showed resolved stellar populations and Tip of the Red
Giant Branch derived distances consistent with M101 group membership. The other
17 were found to have no resolved stellar populations, meaning they are
background low surface brightness (LSB) galaxies. It is notable that many LSB
objects which had previously been assumed to be M101 group members based on
projection have been shown to be background objects, indicating the need for
future diffuse dwarf surveys to be careful in drawing conclusions about group
membership without robust distance estimates. In this work we update the
satellite luminosity function of M101 based on the presence of these new
objects down to M_V=-8.2. M101 is a sparsely populated system with only 9
satellites down to M_V~-8, as compared to 26 for M31 and 24.5\pm7.7 for the
median local Milky Way (MW)-mass host. This makes M101 the sparsest group
probed to this depth, though M94 is even sparser to the depth it has been
examined (M_V=-9.1). M101 and M94 share several properties that mark them as
unusual compared to the other local MW-mass galaxies examined: they have a
sparse satellite population but also have high star forming fractions among
these satellites; such properties are also found in the galaxies examined as
part of the SAGA survey. We suggest that these properties appear to be tied to
the galactic environment, with more isolated galaxies showing sparse satellite
populations which are more likely to have had recent star formation, while
those in dense environments have more satellites which tend to have no recent
star formation. Overall our results show a level of halo-to-halo scatter
between galaxies of similar mass that is larger than is predicted in the
\LambdaCDM model.
