How are payments to the Fly Fitness Brand Fund made?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 13.3.1. Franchisor has established a national fund on behalf of the System for national advertising, marketing, and brand development (the "Brand Fund"). Franchisee is required to contribute to the Brand Fund two percent (2%) of the weekly Gross Revenue generated by the Franchised Business ("Brand Fund Contribution"). Payments will be made in the same manner and time as the Royalty Fees. If Franchisee fails to timely report Gross Revenue, then, in addition to a late fee and interest pursuant to Sections 6.2 and 6.3 hereof, Franchisor shall collect one hundred twenty percent (120%) of the last Brand Fund Contribution payable. Franchisor shall reconcile amounts when Gross Revenue are reported.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, franchisees are required to contribute to the Brand Fund, with the contribution being two percent (2%) of the weekly Gross Revenue generated by the Franchised Business. These Brand Fund payments are to be made in the same manner and time as the Royalty Fees.
If a Fly Fitness franchisee fails to report Gross Revenue on time, they will be subject to a late fee and interest, as detailed in Sections 6.2 and 6.3 of the agreement. In addition to these charges, Fly Fitness will collect one hundred twenty percent (120%) of the last Brand Fund Contribution payable. The franchisor will reconcile these amounts once the Gross Revenue is reported.
This means that prospective Fly Fitness franchisees need to be diligent in reporting their Gross Revenue on time to avoid penalties. The Brand Fund contributions are a percentage of weekly revenue, so franchisees should factor this ongoing cost into their financial projections. The reconciliation process mentioned suggests that Fly Fitness has a system in place to correct any over or under payments once accurate revenue figures are submitted.