What is the development fee for a Fly Fitness multi-unit development agreement?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
n 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 u
Source: Item 5 — INITIAL FEES (FDD page 8)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the development fee for a Multi-Unit Development Agreement is calculated based on the number of units a developer commits to develop. The fee is $50,000 for the first unit, plus 50% of the discounted initial franchise fee for each additional Fly Fitness outlet. The initial franchise fee is discounted for existing franchisees in good standing. For a three-unit commitment, the Development Fee is $75,000, which is calculated as $50,000 for the first unit + ((50% x $25,000) x2) for the additional two units.
The remaining balance of $12,500 per outlet is payable as the developer's subsequent sites are approved and franchise agreements signed. This fee is fully earned by Fly Fitness upon signing the Development Agreement and is non-refundable under any circumstances.
This means that a prospective franchisee entering into a multi-unit development agreement with Fly Fitness must pay a non-refundable development fee upfront. The amount depends on the number of units they commit to develop, with a reduced rate for each additional unit beyond the first. For example, someone committing to three units would pay $75,000 upfront, with the balance due as each subsequent location is approved. This structure incentivizes multi-unit development while providing Fly Fitness with immediate capital.
It is important to note that Fly Fitness may offer special incentive programs that could modify the development fee, and they reserve the right to change or withdraw these programs without notice. A prospective franchisee should confirm the current fee structure and any available incentives before signing a Multi-Unit Development Agreement.