What are the potential financial implications for a Bft franchisee, considering the initial investment in Item 7 and the ongoing royalty fees in Item 6?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
NITIAL INVESTMENT**
A. Franchise Agreement
| Type of Expenditure 1 | Low Amount | High Amount | Method of Payment | When Due | To Whom Payment Is to be Made |
|---|---|---|---|---|---|
| Initial Franchise Fee 2 | $60,000 | $60,000 | Lump sum by certified check or bank wire | At signing of Franchise Agreement | Us |
| Sourcing Fee2 | $0 | $28,000 | Lump sum by certified check or bank wire | At signing of Franchise Agreement | Us |
| Travel & Living | $0 | $2,500 | As arranged | As incurred | Transportation |
| Expenses While | Carriers, Hotel | ||||
| Training 3 | Facilities, Etc. | ||||
| Real Estate/Lease 4 | $37,000 | $75,500 | As arranged | As incurred | Landlord; Attorneys; Accountants |
| Net Leasehold Improvements (Net of Estimated Tenant Improvement Allowances) 5 | $72,000 | $560,500 | As arranged | As incurred | Approved Suppliers (Third Party), Architects and Contractors |
| Signage 6 | $8,000 | $37,000 | As arranged | As incurred | Approved Suppliers (Third Party) and Vendors |
| Insurance 7 | $5,017 | $9,826 | As arranged | Before Opening | Approved Suppliers (Third Party) |
| Fitness Equipment & Initial FF&E Package 8 | $198,500 | $236,000 | As required | Before Opening | Us |
| Pre-Sales and Soft Opening Retail Inventory Kit 9 | $14,000 | $18,000 | Lump Sum | Before Opening | Us |
| Audio / Visual | $38,500 | $38,500 | As arranged | As arranged | Approved |
| Package, Computer | Suppliers (Third | ||||
| System, and Related | Party) and | ||||
| Components 10 | Vendors | ||||
| Initial Marketing & Advertising Spend 11 | $36,800 | $50,200 | As arranged | As arranged | Approved Suppliers (Third Party) and Vendors |
| Initial Instructor | $5,000 | $5,000 | As arranged | As arranged | Us |
| 12 | |||||
| Training Fee | |||||
| Type of Expenditure 1 | Low Amount | High Amount | Method of Payment | When Due | To Whom Payment Is to be Made |
| ----------------------------------------------- | --------------- | ---------------- | ---------------------- | ------------- | ------------------------------------------------ |
| Technology and Software Fees 13 | $5,019 | $5,019 | As arranged | As arranged | Us and Approved Suppliers (Third- Party) |
| Additional Funds – 3 months 14 | $30,000 | $78,000 | As arranged | As incurred | Employees, Vendors, Utilities |
| TOTAL ESTIMATED INITIAL INVESTMENT | $509,836 | $1,204,045 |
Notes to Table A:
All amounts payable to us are non-refundable, unless otherwise noted. Amounts payable to suppliers/vendors are refunded according to arrangements you make with the vendor, if any. These figures are only estimates of the range of your initial costs during the development of your Studio, the Pre-Sales Phase, and the first three (3) months of operation after your Studio's Soft Opening. Leasing and financing is available for many of the above expenses. We do not offer direct or indirect financing, but we may assist you in obtaining working capital through other sources.
1 General. The initial investment table shows certain expenditures required to establish and operate a Studio. This Item 7 assumes and expects that (a) you will timely perform all pre-opening obligations and open and commence operations of your Studio within the time periods prescribed in your Franchise Agreement; and (b) you will develop and build your Studio in accordance with our specifications for Studios. The typical Studio will likely be approximately 2,400 to 2,800 square feet in size and be in a rectangular shape. All estimates listed in the table above exclude tax.
2 Initial Franchise Fee. The Initial Franchise Fee is non-refundable. The Initial Franchise Fee for a single Studio is $60,000. We do not provide financing for the Initial Franchise Fee. As provided in Item 5, if this is your (or your affiliates') second Studio, the Initial Franchise Fee will be reduced to $50,000, and if this is your (or your affiliates') third or subsequent Studio, this Initial Franchise Fee will be reduced to $40,000.
Additionally, if you are an existing franchisee and a franchise broker is owed a commission in connection with the purchase of your additional franchise based on a previously-made introduction to us or our affiliates, you will pay us an additional sourcing fee of $28,000 (in addition to the Initial Franchise Fee).
3 Travel and Living Expenses While Training. You (or, if you are an entity, your Operating Principal) must complete the "Owner/Operator Training Module" and our proprietary initial training program (the "Initial Training Program"). We will not charge any tuition or training fee in connection with your attendance of our Initial Training Program, provided all individuals attend at the same time. The estimate in Table A above assumes that you (or, if you are an entity, your Operating Principal) will attend the Owner/Operator Training Module of the Initial Training Program, and you will be responsible for the costs and expenses associated with attending our Initial Training Program (e.g., transportation, meals, lodging and other expenses).
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, prospective franchisees face significant financial implications stemming from both the initial investment and ongoing royalty fees. The estimated initial investment for a single Bft studio ranges from $509,836 to $1,204,045. This substantial investment covers various expenditures, including a $60,000 initial franchise fee, real estate and lease costs estimated between $37,000 and $75,500, net leasehold improvements ranging from $72,000 to $560,500, and fitness equipment and FF&E package costs between $198,500 and $236,000. Additionally, franchisees must budget for pre-sales and soft opening retail inventory ($14,000 to $18,000), audio/visual package and computer systems ($38,500), initial marketing and advertising ($36,800 to $50,200), and additional funds for the first three months of operation ($30,000 to $78,000). These costs can vary widely based on location, studio size, and specific vendor choices. For multi-unit agreements, a development fee of $20,000 is required at signing, along with a sourcing fee that could range from $0 to $50,000. These initial costs highlight the considerable capital required to launch a Bft franchise.
Beyond the initial investment, Bft franchisees must also pay ongoing royalty fees. The royalty fee is 7% of the studio's gross sales, paid weekly. Gross sales include all revenue generated by the studio, including sales of gift cards and proceeds from business interruption insurance, but exclude sales tax and allowances issued to clients. This ongoing royalty represents a significant portion of the franchisee's revenue and must be factored into their financial projections. Franchisees should carefully consider their projected sales volume and ensure that they can comfortably afford the weekly royalty payments while maintaining profitability.
Furthermore, franchisees may incur additional training fees. While initial training for the franchisee (or operating principal) is typically included, fees may apply for additional staff or if training is required at a later date. If a franchisee acquires an existing Bft studio from another franchisee, they will be required to pay the then-current training fee for personnel needing to attend the initial training program. These additional fees can add to the overall financial burden, particularly during the initial stages of operation.
In summary, the financial implications for a Bft franchisee are substantial, encompassing a significant initial investment and ongoing royalty obligations. Prospective franchisees should conduct thorough financial planning, considering all potential costs and revenue streams, to ensure the long-term viability of their Bft franchise. Understanding these financial commitments is crucial for making an informed decision about investing in a Bft franchise.