The royalty rate of 8.0% is above the typical range of 6.0-7.5% for fitness franchises. What is the rationale for this higher rate, and are there any performance thresholds or conditions that could result in reduced royalty rates?
#1
The transfer fee of $23,600 significantly exceeds the typical range of $10,000-$17,138.50. What specific services or approvals does this fee cover, and is it negotiable or fixed?
#2
Average gross sales of $378,753 fall below the typical range for this category. How many franchises reported sales data for this figure, and what is the range of reported sales performance?
#3
The non-compete period of 1 year is shorter than the typical 2-year period for this category. Why was this period chosen, and does it adequately protect the franchisor's competitive interests?
#4
The system currently has only 1 unit. What is the franchisor's timeline and strategy for expansion, and how many new units are projected for the next 3 years?
#5
Can you provide the specific 8 conditions that must be satisfied for renewal of the franchise agreement, and what happens if a franchisee fails to meet any of these conditions?
#6
The franchise agreement requires a personal guarantee with spouse acknowledgment. Are there circumstances under which the personal guarantee can be limited or released, and what are the specific indemnification obligations?
#7
You mention 6 supplier restriction categories for purchasing approved products. Can you provide details on these categories, the approved suppliers, and how pricing is determined for mandatory purchases?
#8
Has the franchisor experienced any disputes with franchisees related to renewal conditions, non-compete enforceability, or supplier restrictions that did not result in formal litigation?
#9
What is the actual cost of premises upgrades required at renewal, and are franchisees given flexibility in timing or can the franchisor mandate these upgrades immediately upon renewal?
#10
The territory includes encroachment protection despite not being exclusive. How is this protection defined, and what recourse do franchisees have if the franchisor allows a competing unit within their protected territory?
#11
Given the small current unit count, what support infrastructure and services are available, and how do you ensure franchisees receive the training and marketing support promised in the disclosure document?
#12
Are there any pending FTC investigations or regulatory actions against the franchisor that would not appear in traditional litigation records?
#13
What percentage of initial franchisees remain active, and can you provide contact information for existing or former franchisees for reference checks?
#14
The technology fee of $250 monthly is listed separately. What specific services, software, or systems does this cover, and are there any additional technology-related fees?
#15
Can you provide historical financial data for the one existing franchisee, including actual unit economics and profitability?
#16
Are there any provisions in the agreement that allow the franchisor to modify fees, systems, or operational requirements during the franchise term?
#17