Fitness Together

The franchisor has initiated 2 litigation cases in the past 3 years. Can you provide details on the nature of these cases and how they were resolved?

With a termination rate of 5.4%, significantly above the typical 0.0-1.68% range, what are the most common reasons franchisees are being terminated?

The system has declined by 13 units over 3 years (a -4.27% CAGR). What factors have contributed to this contraction, and what strategies is the franchisor implementing to stabilize or grow the network?

Average gross sales of $383,476 fall below the typical range of $386,914-$796,352. Can you explain the variance in unit profitability and what benchmarks franchisees should expect?

The non-compete radius of 3 miles is significantly shorter than the typical 10.0-25.0 mile range for this category. How strictly is this enforced, and what protections do franchisees have against direct competition?

The transfer fee of $20,000 exceeds the typical range. What is included in this fee, and are there circumstances where it can be reduced or waived?

The agreement lists 23 termination causes compared to the typical 15.0-21.0 range. Can you provide the complete list of non-curable defaults and explain which ones are most commonly cited?

With territory marked as protected but not exclusive, are there restrictions on the franchisor opening additional Fitness Together locations within my territory?

The dispute resolution clause requires binding arbitration in Denver, Colorado. What is the typical cost of arbitration, and has this location been inconvenient for franchisees in other regions?

Can you provide a detailed breakdown of the 10 closures in 2023 versus the 5 closures in 2024? Were these franchisee terminations, franchisor closures, or bankruptcies?

Item 19 is provided showing average gross sales. Can you also provide median sales figures, the number of units reporting, and a breakdown by location type and maturity?

The renewal fee equals 25% of the then-current franchise fee. If your initial fee was $40,000, what would the renewal fee be, and are there any adjustments to royalties or other fees upon renewal?

How many of the 23 termination causes require a cure period, and how many are immediate grounds for termination without opportunity to remedy?

Personal guarantees are required and may include spouses. Are both spouses required to sign the personal guarantee, and what debts or obligations are covered?

Can you clarify the mandatory supplier relationships? Which categories are truly mandatory, and are there alternative approved suppliers or is there only one option per category?

The score for System Health is 32, well below the typical 50.0-75.0 range. What specific factors are contributing to this low score, and what is the franchisor's plan to improve system health?

With the litigation count of 3 cases in 3 years, are there any recurring legal issues or patterns in the types of disputes the franchisor faces with franchisees?

The renewal conditions count is 6, below the typical 7.0-9.0 range. What conditions must be met for renewal, and how frequently are franchisees denied renewal?

Can you provide a list of all designated suppliers and explain why mandatory purchasing is required rather than allowing franchisee discretion?

Top quartile sales of $545,037 are below typical benchmarks. What characteristics do the top-performing units share, and what is the timeline to reach profitability?