What is the estimated range for security deposits and pre-opening amounts under the lease for approved premises for a Fitstop franchise?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
| YOUR ESTIMATED INITIAL INVESTMENT | ||||
|---|---|---|---|---|
| Type of Expenditure | Amount | Method of Payment | When Due | To Whom Payment is to be Made |
| Initial Franchise Fee1 | $50,000 | Lump sum | Upon execution | Us |
| Initial Marketing Spend2 | $10,000 | Lump sum | Prior to opening | Approved Supplier for digital/online marketing; Third-Party Provider for other expenditures |
| Other Initial Marketing and Promotional Activities2 | $1,000 to $10,000 | As arranged | As invoiced or agreed | Approved Supplier and/or other Third-Party Providers (videographer, etc.) |
| Training-Related Costs and Expenses3 | $1,000 to $7,500 | As arranged | Prior to Opening | Third-Party Providers for Travel, Lodging, Meals and Local Transportation |
| Site Selection Assistance | $0 to $10,000 | Lump sum | Prior to opening | Approved Supplier or other Third-Party Provider |
| Security Deposit and other Pre-Opening Amounts under Lease for Approved Premises5 | $8,000 to $75,000 | As arranged between you and the landlord. | As negotiated and agreed in the lease | Third-Party Landlord |
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, the estimated initial investment for security deposits and other pre-opening amounts under the lease for approved premises ranges from $8,000 to $75,000. These amounts are arranged between the franchisee and the landlord and are negotiated and agreed upon in the lease. The payments are made to the third-party landlord.
The FDD notes that the lease terms, including rent, can vary significantly based on factors such as demand in the designated territory, population and demographics, and the franchisee's negotiation skills with the landlord. The security deposit amount may also be refundable, depending on the landlord's policies.
The low end of the estimate ($8,000) assumes a location in a suburban or rural area with a security deposit equal to 1-2 months of rent. The high end of the estimate ($75,000) is for premises in higher-end real estate markets or densely populated areas, where the security deposit could be 2-3 months of rent. These estimates are based on Fitstop's affiliate's experience in opening franchised locations in California, the affiliate franchisor's experience in Australia, and information from third-party real estate brokers and consultants.