What is the definition of the 'Initial Franchise Fee' for Fly Fitness?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
ITEM 5: INITIAL FEES**
We will charge you an initial franchise fee ("Initial Franchise Fee") when you sign the Franchise Agreement. The Initial Franchise Fee is $50,000. This payment is fully earned by us and due in lump sum when you sign the Franchise Agreement. The Initial Franchise Fee is not refundable under any circumstance.
From time to time, we may offer special incentive programs as part of our franchise development activities. We reserve the right to offer, modify or withdraw any incentive program without notice to you. We currently offer a 20% discount from the Initial Franchise Fee for Fly Fitness franchisees in good standing who wish to open an additional unit.
We will charge you a development fee ("Development Fee") when you sign the Multi-Unit Development Agreement. The Development Fee is an amount equal to $50,000 for the first unit, plus 50% of the discounted initial franchise fee for each additional Fly Fitness outlet you commit to develop under the Multi-Unit Development Agreement. For a three-unit commitment, the Development Fee is $75,000 and is calculated as follows, $50,000 + ((50% x $25,000) x2) = $75,000. The remaining balance of $12,500 per outlet shall be payable as the developer's subsequent sites are approved and franchise agreements signed. The Development Fee is fully earned by us and due in lump sum when you sign the Development Agreement. The Development Fee is not refundable under any circumstance.
From time to time, we may offer special incentive programs as part of our franchise development activities. We reserve the right to offer, modify or withdraw any incentive program
Source: Item 5 — INITIAL FEES (FDD page 8)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the Initial Franchise Fee is the fee charged when signing the Franchise Agreement. The standard Initial Franchise Fee is $50,000, which is fully earned by Fly Fitness upon signing and is not refundable under any circumstances. This fee is payable in a lump sum. The Initial Franchise Fee covers the cost of initial management training for up to three people.
Fly Fitness may offer special incentive programs, such as a 20% discount on the Initial Franchise Fee for existing franchisees in good standing who wish to open an additional unit. These programs can be modified or withdrawn without notice.
For franchisees entering into a Multi-Unit Development Agreement, a Development Fee is charged. This fee covers the first unit at $50,000, plus 50% of the discounted initial franchise fee for each additional Fly Fitness outlet the franchisee commits to develop. For example, a three-unit commitment would incur a Development Fee of $75,000. The remaining balance of $12,500 per outlet is payable as subsequent sites are approved and franchise agreements are signed. Like the Initial Franchise Fee, the Development Fee is fully earned upon signing the Development Agreement and is non-refundable.