To whom are payments for grand opening advertising made for a Fly Fitness franchise?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
| Leasehold Improvements, Construction and/or Remodeling6 | $160,500 | $267,500 | As required by supplier, contractor, or landlord | Before opening, as required by supplier. | Suppliers, contractor and/or Landlord |
|---|---|---|---|---|---|
| Furniture, Fixtures and Equipment7 | $3,210 | $6,420 | As required by supplier | Before opening | Suppliers |
| Signage8 | $4,280 | $7,490 | As incurred | Before opening | Suppliers |
| Business Licenses and Permits9 | $214 | $535 | As required by government agencies | Before opening, as required by government agencies | Government Agencies |
| Computer | $1,605 | $2,140 | As required by | Before opening | Suppliers |
| Systems10 | suppliers | ||||
| Security System | $0 | $2,140 | As required by suppliers | Before opening | Suppliers |
| Initial Inventory to Begin Operating11 | $7,490 | $16,050 | As required by suppliers | Before opening | Suppliers and our affiliate |
| Supplies12 | $2,140 | $3,210 | As required by suppliers | Before opening | Suppliers |
| Professional Fees13 | $2,675 | $5,350 | As required by providers | As incurred | Attorney, Accountant, Other Professional Service Providers |
| Fitness | $32,100 | $128,400 | As required by | Before opening | Suppliers |
| Equipment14 | suppliers | ||||
| Grand Opening | $15,000 | $21,400 | As required by | As required by | Suppliers |
| Advertising 15 | supplier | supplier |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 14–18)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, grand opening advertising payments are made to suppliers. The table in Item 7 outlines various expenditures a franchisee will incur when opening a Fly Fitness franchise. Specifically, the grand opening advertising costs are estimated to be between $15,000 and $21,400. These payments are due as required by the supplier and are paid directly to the supplier.
This means that a prospective Fly Fitness franchisee should budget between $15,000 and $21,400 for grand opening advertising. It is important for franchisees to establish relationships with reliable suppliers who can provide effective advertising services. The franchisee is responsible for managing these relationships and ensuring that payments are made on time according to the agreed-upon terms.
It is also important to note that after the grand opening phase, Fly Fitness franchisees must continue to invest in local advertising and marketing. The FDD states that franchisees must spend a minimum of $500 per month on these activities. Fly Fitness also retains the right to increase the local advertising contribution by 10% annually, which could further impact the franchisee's ongoing expenses. Franchisees must also provide quarterly reports and documentation of their local advertising expenditures to Fly Fitness.
Fly Fitness also has the right to collect the local marketing contribution and allocate it on behalf of the franchisee if the franchisee fails to meet the minimum advertising requirements outlined in the Operations Manual. This highlights the importance of adhering to Fly Fitness's advertising guidelines and maintaining open communication with the franchisor regarding marketing efforts.