What is the estimated range of 'Additional Funds' a Fitstop franchisee should have available for the 4 months following opening, and how are these funds disbursed?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
| Professional Fees | $1,000 to $10,000 | As arranged | As invoiced | Third-Party Professional(s) – Lawyer and Accountant |
|---|---|---|---|---|
| Music Licensing | $500 to $1,000 | As arranged | Ongoing basis | Approved Supplier |
| Subscription10 | ||||
| (for play, not synch) | ||||
| Other Miscellaneous Pre- Opening Expenditures | $0 to $5,000 | As arranged | As incurred | Approved Supplier(s) and Third-Party Suppliers/Providers |
| Rent – 4 Months after | $20,000 to $50,000 | Lump sum | Prior to opening | Third-Party Landlord |
| opening11 | ||||
| Additional Funds – 4 Months Following Opening12 | $25,000 to $70,000 | Various | As incurred | Personnel of the Franchised Business; Approved Supplier(s) and/or Other Third-Party Providers; other vendors; state agencies; etc. |
Source: Item 7 — TEM 7: ESTIMATED INITIAL INVESTMENT (FDD pages 15–19)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, a franchisee should have between $25,000 and $70,000 available as 'Additional Funds' for the first 4 months after opening their location. These funds are disbursed on a 'various' schedule, meaning the timing and amounts can fluctuate.
These additional funds are intended to cover expenses that may arise during the initial months of operation. The FDD specifies that these funds will likely be paid to personnel of the franchised business, approved suppliers, other third-party providers, various other vendors, and potentially state agencies. This broad range of recipients highlights the diverse operational costs a new Fitstop location may face.
The FDD also notes several factors that can influence the actual amount of additional funds needed. These include how well the franchisee follows the Fitstop system, their management skills, local economic conditions, the local market for fitness services, and the level of competition. It's important to note that this estimate does not account for debt services or any salary or compensation for the Franchise Operator or any other Franchise Owner.
Given the variability in potential costs, Fitstop advises prospective franchisees to carefully review these figures in light of local conditions and the local economy. Consulting with an accountant is also recommended to ensure a thorough understanding of the financial requirements for launching and sustaining a Fitstop franchise.