What is the annual fee Fly Fitness pays for the licensing agreement with "Fly – A Fitness Revolution"?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
. There were no material transactions or events in the subsequent period requiring disclosure or recognition in the statements.
2. INTANGIBLE ASSETS
The Company entered into a licensing agreement with "Fly – A Fitness Revolution" during 2022 for the use of intellectual property, including trademarks, logos and the Fly Fitness name. This agreement included a $125,000 lump-sum p
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 44)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, Fly Fitness entered into a licensing agreement with "Fly – A Fitness Revolution" in 2022. This agreement allows Fly Fitness to use intellectual property, including trademarks, logos, and the Fly Fitness name.
As part of this agreement, Fly Fitness made a one-time lump-sum payment of $125,000 at the beginning of the agreement. In addition to this initial payment, Fly Fitness is obligated to pay an annual fee of $20,000 for the duration of the 10-year agreement.
For a prospective franchisee, this means that Fly Fitness has already committed to this annual licensing fee. This cost is part of Fly Fitness's overhead and is not a direct obligation of the franchisee. However, it's important for franchisees to understand the financial obligations of the franchisor, as the franchisor's financial health can impact the support and services they provide to franchisees.