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What pre-opening purchases or leases for a Fitstop franchise, as mentioned in Item 9, are further detailed in Items 5 and 7?

Fitstop Franchise · 2024 FDD

Answer from 2024 FDD Document

Section(s) in Franchise Item in Disclosure
Obligation
Agreement Document
Business selection and acquisition §2 Item 7
Pre-opening purchases/leases §9 Items 5 and 7
Business development and other pre-opening §2 Items 7 and 11
requirements
    1. Signage. This estimated range is designed to cover the costs you will incur in connection with acquiring the exterior signage, as well as any interior signage and/or window decals, which bear the Proprietary Marks and are used to identify and associate the Franchised Business with our brand. As of the Issue Date, our standard franchise offering assumes that you will acquire this signage from our designated Approved Supplier.
    1. Computer System and Required Software. This estimated range is designed to cover the costs associated with acquiring the Computer System hardware and other components disclosed more fully in Item 11 of this Disclosure Document, as well as any initial costs associated with setting up that Computer System so that it runs all Required Software prior to opening.
    1. Music Licensing and Limitations. This is the estimated amount charged by our current Approved Supplier for music licensing that permits a System franchisee to stream and play music at the Premises for the enjoyment of both your personnel and clientele.
    1. Rent 4 Months Post-Opening. Rent for each franchised business is dependent on size, quality and position of Premises and local market conditions. This amount will vary depending on Lease negotiations between the landlord and the franchisee (as tenant) and, again, our standard franchise offering and Chart above assumes that your Premises will be between 1,800 and 3,000 square feet is size. For certain premium location(s) in urban areas, you or other System franchisees may choose to expend more than the amounts suggested herein but such a decision would need to be approved by Franchisor and may be beyond the scope of Franchisor's standard franchise offering (and this range disclosed this Chart).

unless we agree otherwise in writing, we expect that you will purchase new model computer(s), tablet(s) and a printer/scanner, consistent with any more specific directives set forth in the Manuals.

As of the Issue Date, we estimate that the pre-opening costs associated with acquiring the required computer hardware components of our System's computer system ("Computer System") will between $3,000 and $7,000. Please note that this range does not account for any other electronics or security system you must and/or determine to purchase in connection with the Franchised Business buildout, which are covered more fully in Item 7 above. We expect that access to all current Required Software will be afforded to our System franchisees as part of the Technology Fee (which is currently 2% of Gross Revenue as detailed more fully in Item 6).

We estimate that you may spend an average of between $500 and $1,500 (per year from the date you acquire the same) on annual updates and maintenance to the Computer System hardware, including any non-material upgrades.

What This Means (2024 FDD)

According to Fitstop's 2024 Franchise Disclosure Document, Item 9 references pre-opening purchases or leases, which are further detailed in Items 5 and 7. Item 7 provides estimated costs for several pre-opening purchases, including signage, computer systems and software, music licensing, and rent. The estimated range for the computer system and required software is between $3,000 and $7,000.

Item 7 also mentions that rent is dependent on the size, quality, and position of the premises, as well as local market conditions. Fitstop's standard franchise offering assumes the premises will be between 1,800 and 3,000 square feet. The franchisee is responsible for negotiating lease terms with the landlord. Item 7 also includes additional funds for the first four months post-opening to cover expenses, though these figures are estimates and depend on factors like adherence to the franchise system, management skills, local economic conditions, and competition.

Item 11 further clarifies that Fitstop expects franchisees to purchase new model computers, tablets, and a printer/scanner. The pre-opening costs for the computer system hardware are estimated to be between $3,000 and $7,000, not including other electronics or security systems. Franchisees will also be required to pay a Technology Fee, which is currently 2% of Gross Revenue, for access to the Required Software. Franchisees may also spend between $500 and $1,500 annually on updates and maintenance to the computer system hardware, including non-material upgrades.

Prospective Fitstop franchisees should carefully review Items 5, 7, and 11 of the FDD to understand the full scope of pre-opening expenses and lease obligations. It is important to consider local market conditions and negotiate favorable lease terms to manage costs effectively. Consulting with an accountant and other advisors is recommended to assess the financial feasibility of the franchise opportunity.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.