What are some examples of pre-opening payments that a Fitstop franchisee might need to make?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
IAL INVESTMENT**
| 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 | |
| Design and Layout | $3,000 to $10,000 | As arranged | Prior to opening | Approved Supplier(s) and/or Other Third-Party Provider(s) | |
| Operational Equipment and | $70,000 to $100,000 | Lump sum | Prior to opening | Approved Supplier(s) | |
| Supplies Package6 | |||||
| Leasehold Improvements7 | $100,000 to $325,000 | As arranged | As invoiced | Third-Party Contractor and Other Third-Party Vendors/Providers | |
| Signage: Exterior/Interior8 | $10,000 to $50,000 | As agreed | As invoiced | Approved Supplier(s) | |
| Computer System and Required Software – Initial Costs9 | $3,000 to $7,000 | Lump sum | As invoiced and prior to opening | Approved Supplier(s) | |
| Other FFE | $0 to $10,000 | As arranged | As incurred | Approved Supplier(s) and/or other Third-Party Vendor(s) | |
| Utility Deposits (water, | $1,000 to $3,000 | As | Prior to opening | Utility Providers | |
| electricity, gas) | incurred | ||||
| Insurance Premiums | $2,000 to $10,000 | As arranged | As incurred and invoiced | Third-Party Insurance Carrier/Provider | |
| Business Licenses & Permits | $500 to $10,000 | Lump sum | Prior to opening | Local, state, and/or federal government agencies |
| 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; |
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, there are several pre-opening payments that a franchisee may need to make. These include an initial franchise fee of $50,000 paid upon execution of the agreement, an initial marketing spend of $10,000, and other initial marketing and promotional activities ranging from $1,000 to $10,000. These marketing payments are typically made to approved suppliers or third-party providers.
Additional pre-opening payments may include training-related costs and expenses, which range from $1,000 to $7,500, site selection assistance, which can cost between $0 and $10,000, and security deposits and other pre-opening amounts under the lease for the approved premises, ranging from $8,000 to $75,000. Furthermore, franchisees should budget for design and layout costs ($3,000 to $10,000), operational equipment and supplies ($70,000 to $100,000), and leasehold improvements ($100,000 to $325,000). Signage costs range from $10,000 to $50,000, while computer systems and required software can cost between $3,000 and $7,000.
Other potential pre-opening expenditures include costs for other furniture, fixtures, and equipment (FFE) which can range from $0 to $10,000, utility deposits between $1,000 and $3,000, insurance premiums ranging from $2,000 to $10,000, and business licenses and permits which can cost from $500 to $10,000. Franchisees may also need to pay professional fees ($1,000 to $10,000), music licensing fees ($500 to $1,000), other miscellaneous pre-opening expenditures ($0 to $5,000), and rent for the first four months ($20,000 to $50,000).
These pre-opening costs can vary significantly based on location, the size of the premises, and specific choices made during the build-out process. It is important for prospective Fitstop franchisees to carefully review these figures, consider local conditions, and consult with an accountant to prepare an accurate estimate of their initial investment.