Gracie Barra Franchise Systems, Inc.

The initial contract term of 5 years is significantly shorter than the typical 10-year term in this category. What is the rationale for this shorter term, and what are the renewal conditions and associated fees?

Your franchise fee of $10,000 and transfer fee of $1,000 are substantially below industry norms. How do these low fees affect the franchisor's ability to support franchisees, and what specific support is included at this investment level?

The technology fee of $1,500 monthly is more than double the typical rate. What specific technology services and platforms are included in this fee, and is it subject to annual increases?

One case is currently pending against the franchisor. What is the nature of this litigation, and how might it affect franchisees or the system?

Franchisor-initiated terminations increased from 0 in 2022 to 5-7 in 2023-2024. What specific violations or conditions trigger termination, and what is the process for addressing underperforming units?

Ten to eleven units closed in each of 2023-2024. Are these primarily voluntary closures or franchisor-initiated? What were the primary reasons cited by franchisees for closure?

With no specified renewal fee and only 3 renewal conditions, what are those conditions, and under what circumstances might renewal be denied?

The maximum potential contract term is 5 years. If renewal is not granted, what obligations does the franchisor have to assist with transition or sale of the unit?

Does the franchise agreement include personal guarantees from all equity owners and spouse non-disclosure agreements as mentioned in the legal review? What specific obligations do these entail?

Royalty and advertising fund rates are not disclosed in the FDD summary provided. What are the actual ongoing royalty and ad fund percentages, and how are they calculated?

The system grew from 265 units 3 years ago to 316 today. What geographic markets are saturating, and will franchisees receive territory protection against master franchisors or area developers in their region?

Exclusive territory is granted. What are the specific boundaries of the exclusive territory, and under what circumstances could the franchisor establish additional locations or allow encroachment?

With a 5-year contract term and no renewal fee shown, what happens to franchisees who build strong businesses but are not offered renewal? What notice period applies?

Transfer fee of $1,000 is unusually low. Are there other costs, franchisor approval requirements, or conditions associated with transferring a franchise to a buyer?

Item 19 (Financial Performance Representations) is not included in the FDD. Does the franchisor provide any earnings claims, average unit volumes, or financial performance data to prospective franchisees?

What is included in the $10,000 franchise fee in terms of initial training, site selection, equipment, inventory, or other startup costs? What is the total estimated investment to open a unit?

How does the franchisor support franchisees in a 5-year business model? What ongoing training, marketing, operational support, and technology updates are provided?

Are there any restrictions or non-compete provisions that prevent franchisees from operating competing fitness businesses after the 5-year term expires or upon closure?