What is included in the ranges provided for 'Required Purchases' for a Fitstop franchise?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
The products or services we require you to purchase or lease from an Approved Supplier, or purchase or lease in accordance with our standards and specifications, are referred to collectively as your "Required Purchases." We estimate that your Required Purchases will account for approximately 65% to 85% of your total costs incurred in establishing your Franchised Business, and approximately 25% to 65% of your ongoing costs to operate the Franchised Business after the initial start-up phase. Please be advised that these ranges for "Required Purchases" include the lease for your approved Premises given that it must meet our then-current site selection criteria and specifications.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–23)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the ranges provided for 'Required Purchases' include the lease for the approved premises. The FDD specifies that the premises must meet Fitstop's then-current site selection criteria and specifications.
Fitstop estimates that required purchases will account for approximately 65% to 85% of the total costs incurred in establishing the franchised business. Furthermore, required purchases account for approximately 25% to 65% of the ongoing costs to operate the Fitstop franchise after the initial start-up phase.
This means a significant portion of a franchisee's initial and ongoing expenses will be directed towards items and services that Fitstop mandates. The inclusion of the premises lease within these percentages highlights the importance of site selection and lease negotiation, as these factors will substantially impact the franchisee's financial performance. Prospective franchisees should carefully consider these percentages and the specific items included in 'Required Purchases' when evaluating the financial viability of a Fitstop franchise.