The technology fee of $999/month is substantially higher than typical for fitness franchises ($199-$716). What specific services, software, or platforms are included in this fee, and is it customizable based on unit size or location?
#1
Your royalty rate of 2.25% is significantly lower than industry standard (6.0-7.5%). How does OHM Fitness sustain franchisee support, marketing, and system development with this reduced royalty structure?
#2
Support and training scores of 70 fall below the typical range (82.0-93.0). What specific training is provided at franchise launch, and what ongoing support is available during the franchise term?
#3
The termination rate of 8.3% is substantially above the typical range (0.0-1.68%). Can you provide details on the specific reasons for the terminations in 2023, including whether they were performance-based, breach-based, or mutual terminations?
#4
The system grew from 1 unit 3 years ago to 13 units today (135% CAGR). What factors contributed to this rapid expansion, and what strategies are in place to ensure unit viability as the system continues to grow?
#5
The franchise agreement includes 14 termination causes, which is below the typical range (15.0-21.0). What specific performance metrics or breaches trigger termination, and how much notice and opportunity to cure are provided?
#6
Your non-compete clause restricts former franchisees from competing for 2 years across the entire Development Territory with no mileage limitation. How is the Development Territory defined, and how large is it typically in terms of square miles or geography?
#7
One unit closed and one was terminated in 2023 from a base of 6 units. Were these isolated incidents or part of a broader pattern? What is the average unit lifespan for OHM Fitness franchises?
#8
The franchise does not offer exclusive territory. How does OHM Fitness manage potential encroachment, and is there a minimum distance required between units?
#9
Transfer fee is $10,000. Is this fee required for all transfers, including transfers to family members or spouse? Can franchisees sublease or operate multi-unit agreements?
#10
Your agreement requires personal guarantees from all owners and their spouses for all financial obligations. Under what circumstances might OHM Fitness pursue personal guarantees against spouses, and are there any limits to personal liability exposure?
#11
What specific indemnification obligations are required of franchisees, and does the franchise agreement limit the franchisor's indemnification obligations in return?
#12
Item 19 financial performance data is not provided in the disclosure document. Will OHM Fitness provide earnings claims, unit profitability data, or historical sales information during the discovery process?
#13
Of the 13 current units, how many have been open for the full term, and what are their average unit volumes and profitability levels by year in operation?
#14
The renewal option provides one 10-year renewal. Are there renewal fees, and under what conditions might renewal be denied? Must the unit be remodeled or updated before renewal?
#15
What are the specific causes for the closure in 2023 (versus the termination), and what support did OHM Fitness provide to that franchisee during their exit?
#16
How are ongoing fees structured beyond royalties and technology fees? Are there marketing fund contributions, mandatory continuing education, or other recurring costs?
#17
The franchise agreement specifies non-compete restrictions for 24 months after termination. Is this timeframe negotiable, and are there geographic carve-outs for multi-location franchisees relocating within the system?
#18