Under what circumstances is the development fee for Fly Fitness refundable?
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 is not refundable under any circumstances. The development fee is paid when signing a Multi-Unit Development Agreement. This fee compensates Fly Fitness for granting the developer the rights to develop multiple Fly Fitness franchise locations according to an agreed-upon schedule. The fee is considered fully earned by Fly Fitness upon signing the agreement.
The development fee structure involves an initial payment of $50,000 for the first unit, plus 50% of the discounted initial franchise fee for each additional unit the developer commits to open. For example, a three-unit commitment requires a $75,000 development fee, calculated as $50,000 + ((50% x $25,000) x2) = $75,000. The remaining balance of $12,500 per outlet is due as subsequent sites are approved and franchise agreements are signed.
Prospective franchisees should be aware that because the development fee is non-refundable, careful consideration should be given before entering into a Multi-Unit Development Agreement with Fly Fitness. Multi-unit developers should confirm that they have adequate capital and resources to fulfill the development schedule, as failure to do so will not result in a refund of the development fee.