When are payments for operating expenses/additional funds due 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 | |||
| Insurance16 | $2,675 | $4,350 | As required by insurer | Before opening | Insurer |
| Operating Expenses / Additional Funds – 3 months17 | $21,400 | $42,800 | As incurred | Payroll weekly, other purchases according to agreed-upon terms | Employees, utilities, suppliers, etc. |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 14–18)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the estimated initial investment for operating expenses/additional funds for the first three months ranges from $21,400 to $42,800. These operating expenses are due as incurred. Payments for payroll are due weekly, while other purchases are due according to agreed-upon terms with employees, utilities, and suppliers.
This means that a Fly Fitness franchisee should be prepared to manage cash flow carefully from the outset. Unlike some initial investments that are paid in a lump sum, these operating expenses will be ongoing and require consistent payment. The franchisee will need to establish payment schedules with various entities, including employees, utility companies, and suppliers, and ensure timely payments to maintain smooth business operations.
It is important to note that these figures are estimates, and actual operating expenses may vary. Fly Fitness recommends that franchisees review these figures carefully with a business advisor. Factors such as management skill, local economic conditions, and sales levels can impact the amount of additional funds needed. Therefore, a franchisee should develop a detailed budget and financial plan to account for potential variations in operating expenses.