HOTWORX

The Franchise Fee of $19,950 is significantly below the typical range of $40,000-$60,000 for fitness franchises. What is included in your initial investment to reach the total startup cost, and are there any additional upfront fees not listed in the FDD?

Your Technology Fee of $150/month is the lowest in the fitness category (typical range $199-$716). What technology systems and support are included in this fee, and has this fee remained constant or changed over the past 3 years?

You have 1 pending litigation case against the franchisor. Can you provide details on the nature of this case, when it was filed, and whether it involves disputes with a franchisee or another party?

Your Total Potential Term of 505 years (99 renewal options × 5 years each) is extraordinarily above the typical 15-20 year potential term for fitness franchises. What are the renewal conditions required to exercise these 99 renewal options, and are there any fees associated with exercising renewals?

You have only 6 renewal conditions compared to the typical 7-9 for fitness franchises. What specific conditions must franchisees meet to renew, and what circumstances would disqualify a franchisee from renewal?

Your Non-Compete clause specifies 2 years but no geographic radius (listed as N/A). What is the actual geographic scope of the non-compete restriction—is it municipality, county, state, or another geographic boundary?

Territory is protected but not exclusive. What protections exist against franchisor-initiated encroachment, and have any franchisees raised concerns about territorial overlap or new unit placement decisions?

Your system has grown 137 units (23.5%) in the past year while maintaining a 0.0% termination rate. What is driving this rapid growth, and are all new units company-owned or franchised?

With 2 litigation cases filed against the franchisor in 3 years and 1 pending, what types of disputes have occurred, and do any involve franchisee contract disputes or regulatory compliance issues?

The Transfer Fee is $10,000. What review process does the franchisor conduct before approving transfers, and what circumstances could lead to denial of a transfer request?

You require equipment and supplies from franchisor-approved suppliers with set minimum and maximum prices. Can you provide a breakdown of typical monthly equipment and supply costs, and is there flexibility in approved vendors?

Personal guarantees are required from franchisees, domestic partners/spouses, and all partners/shareholders/members/managers. Has the requirement for guarantees from domestic partners been enforced or challenged by any franchisees?

What specific minimum and maximum operational standards does the franchisor enforce, and what is the franchisee's recourse if the franchisor imposes changes to operational standards mid-contract?

Of the 5 units that ceased operations in 2024, what were the stated reasons for closure, and were any related to underperformance or franchisor support issues?

The system has no reported franchisee-initiated terminations (0.0% termination rate). Is this because franchisees are successfully retained or because terminations are classified differently in your reporting?

What is the average length of time from franchisee sign-up to first unit opening, and what ongoing training and support is provided beyond the initial training period?

Average Gross Sales are reported at $415,595. What percentage of franchisees meet or exceed this average, and what is the median sales figure versus the mean?

Does the $150/month technology fee include point-of-sale systems, member management software, marketing tools, or other specific platforms, and are there costs beyond this fee for additional technology?

What happens at the end of the initial 10-year term if a franchisee wants to renew? Is approval automatic if conditions are met, or does the franchisor retain discretion to deny renewal?