What is the estimated range for the total initial investment to open a Fitstop franchise?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
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| 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. |
| Total Estimated Initial | $306,000 to $823,500 | |||
| Investment |
Explanatory Notes to Item 7 Chart Above
General Note. The estimated investment ranges were prepared based upon and accounting for: (i) various sources of information, including (a) the experience of our affiliates developing two (2) System Businesses (each, an "Affiliate Business") over the past 18 months, (b) the experience of our Affiliate Franchisor and its System franchisees that have Franchised Businesses operating or under development in Australia, (c) information we have received from our current third-party Approved Suppliers for certain investment items or categories above, (d) information and data that we have received from various real estate brokers and/or other sources for information with respect to current real estate and commercial leasing markets, and (e) various other due diligence; and (ii) a number of expectations and reasonable assumptions that we make as part of our standard franchise offering, such as franchisee (a) securing an approved Premises and opening the Franchised Business within the prescribed timelines set forth in your Franchise Agreement (and on or before the Rent Commencement Date under the lease for the Premises), and (b) ensuring that the Premises is built out in accordance with our current System standards, specifications and processes, and (c) using our Approved Suppliers for certain Required Items as set forth in the Chart above and in Item 8 of this Disclosure Document below.
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- Initial Franchise Fee. Please see Item 5 of this Disclosure Document for additional details regarding this initial fee and the terms associated with the same. This amount must be paid in connection with each Franchised Business you are awarded the right to independently own and operate at the time such rights are awarded, and such amounts are deemed fully earned upon payment under your signed Franchise Agreement.
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- Training-Related Costs and Expenses. This is the estimated range of costs that a new System franchisee can expect to incur in connection with attending the Corporate Training portion of our Initial Training Program at our designated corporate training location (currently located in California). The low end of this estimate assumes that you or your operating principal will be the only person attending the Corporate Training and that the franchisee resides close enough that no major flight costs will be incurred.
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 total initial investment to open a Fitstop franchise ranges from $306,000 to $823,500. This investment covers a variety of expenses, such as the initial franchise fee, marketing, site selection, lease costs, equipment, leasehold improvements, signage, computer systems, and additional funds needed after opening.
The initial investment includes a $50,000 initial franchise fee. Prospective franchisees should also budget for other initial costs, including $10,000 for the initial marketing spend, an additional $1,000 to $10,000 for other marketing and promotional activities, and $1,000 to $7,500 for training-related costs. Site selection assistance can range from $0 to $10,000, while the security deposit and other pre-opening lease amounts can range from $8,000 to $75,000. Design and layout costs are estimated to be between $3,000 and $10,000.
Operational equipment and supplies are a significant part of the initial investment, estimated at $70,000 to $100,000. Leasehold improvements can range from $100,000 to $325,000, and signage costs range from $10,000 to $50,000. The computer system and required software have initial costs of $3,000 to $7,000. Other miscellaneous pre-opening expenditures can range from $0 to $5,000, while utility deposits are estimated at $1,000 to $3,000. Insurance premiums can range from $2,000 to $10,000, and business licenses and permits can cost between $500 and $10,000. Additionally, franchisees should budget $20,000 to $50,000 for rent for the first four months after opening and $25,000 to $70,000 for additional funds during the same period.
Professional fees, including lawyer and accountant fees, can range from $1,000 to $10,000, and music licensing costs $500 to $1,000. These figures are estimates, and actual costs may vary depending on factors such as location, lease terms, and the franchisee's management skills. Fitstop recommends that prospective franchisees carefully review these figures in light of local conditions and consult with their accountant.