Under what circumstances is the initial franchise fee for Fly Fitness refundable?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
ITEM 5: INITIAL FEES**
We will charge you an initial franchise fee ("Initial Franchise Fee") when you sign the Franchise Agreement. The Initial Franchise Fee is $50,000. This payment is fully earned by us and due in lump sum when you sign the Franchise Agreement. The Initial Franchise Fee is not refundable under any circumstance.
From time to time, we may offer special incentive programs as part of our franchise development activities. We reserve the right to offer, modify or withdraw any incentive program without notice to you. We currently offer a 20% discount from the Initial Franchise Fee for Fly Fitness franchisees in good standing who wish to open 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 initial franchise fee is generally not refundable under any circumstances. The standard initial franchise fee is $50,000, which is due in a lump sum when the Franchise Agreement is signed. Fly Fitness considers this payment fully earned upon receipt.
Fly Fitness also charges a development fee for multi-unit development agreements. This fee is also non-refundable under any circumstance. The development fee is $50,000 for the first unit, plus 50% of the discounted initial franchise fee for each additional Fly Fitness outlet a franchisee commits to developing under the Multi-Unit Development Agreement. For example, a three-unit commitment would incur 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 payable as the developer's subsequent sites are approved and franchise agreements signed.
It is important for prospective franchisees to note that while the initial franchise fee and development fees are non-refundable, other deposits related to real estate, such as security deposits or utility deposits, may be refundable according to the terms of the lease or rental contract with the utility provider. Fly Fitness may offer incentive programs that provide a discount on the initial franchise fee, such as a 20% discount for existing franchisees in good standing who wish to open an additional unit.