Given that the franchise fee of $120,000 is double the typical range for fitness franchises ($40,000-$60,000), what specific additional benefits, training, or support justify this premium pricing?
#1
The transfer fee of $50,000 is nearly 3 times the typical range ($10,000-$17,138.50). Under what circumstances would this fee apply, and are there any circumstances where it could be waived or reduced?
#2
The support and training score of 75 is significantly below the typical range of 82.0-93.0 for fitness franchises. What specific training and ongoing support programs are included, and how do they compare to competitors?
#3
The territory score of 65 is below the typical range of 75.0-85.0. While your territory is designated as 'protected,' it is not exclusive and offers no encroachment protection. Can the franchisor place additional franchisees or company-owned locations within your territory?
#4
Can you provide clarity on the 5 renewal conditions mentioned in the contract? What are these specific conditions, and how often have franchisees failed to meet them?
#5
The ad fund rate of 1.5% is below the typical 2.0%. How are these funds utilized, and is there transparency in how advertising dollars are spent?
#6
With zero litigation cases and zero units currently in the system, how long has this franchise system been operating, and how many units have existed at peak operation?
#7
What is the development schedule and minimum performance requirements referenced in the financial obligations clause, and what are the consequences of failing to meet these targets?
#8
The arbitration clause requires all disputes to be resolved in Vancouver, British Columbia, Canada. Would the franchisee be required to travel to Canada for dispute resolution, and who bears the cost of arbitration?
#9
Personal guarantees are required from all owners and their spouses. If the business fails, what is the franchisor's recourse against these personal guarantees, and have personal guarantees been enforced in past disputes?
#10
The transfer clause grants the franchisor a 60-day right of first refusal. If the franchisor exercises this right, what is their offer expected to be based on, and has this right been exercised in any previous transfers?
#11
Late payments incur interest at the maximum rate permitted by law plus a $50 late fee. What is the interest rate being applied, and how frequently are late fees assessed?
#12
The agreement requires area representatives to modify their business as required by the franchisor for renewal. What types of modifications have been required of existing franchisees, and can you provide specific examples?
#13
Given the investment cost score of 68 is below typical, what is the total initial investment required (including build-out, equipment, and working capital), and how does this compare to your market projections?
#14
With a $50,000 renewal fee due every 5 years plus a potential $50,000 transfer fee, what is the total cost of ownership over a 20-year term, and how do these fees factor into profitability projections?
#15
Can you provide historical data on how many franchisees have renewed their agreements versus choosing not to renew or accepting termination?
#16
The non-compete clause is 2 years / 10 miles. After the franchise agreement ends, would a franchisee be prohibited from operating any fitness business or only a yoga-focused fitness business within this radius?
#17
What financial performance data is available from existing franchisees, and why has Item 19 (Financial Performance Representations) not been included in the disclosure document?
#18