Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
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Franchise Costs: Detailed Estimates of Retro Fitness Franchise Costs (2017 FDD)

by Franchise Chatter on August 13, 2013

in Fitness Franchises, Franchise Costs

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Retro Fitness Interior Photo

This post was updated on July 2, 2017 to reflect information from Retro Fitness’s 2017 FDD (Item 7).

Detailed Estimates of Retro Fitness Franchise Costs Based on Item 7 (Estimated Initial Investment) of Retro Fitness’s 2017 Franchise Disclosure Document

  • Payments to Retro Fitness are not refundable. Payments made to third-party vendors may be refundable, subject to vendor’s terms and conditions.
  • Retro Fitness does not provide financing for initial fees. You may obtain financing for the fees listed in the table depending on the terms and conditions of your financing.

1.  Initial Franchise Fee:  $69,000

2.  Opening Advertising – Pre-Sales:  $20,000 to $45,000

3.  Office Supplies:  $500 to $2,000

4.  Computer Equipment:  $1,000 to $4,000

5.  Opening Inventory:  $2,000 to $7,000

6.  Insurance and Bond:  $9,350 to $30,000

7.  Signage:  $15,000 to $45,000

8.  Equipment and Furnishings:  $85,000 to $125,000

  • You must purchase certain equipment and furnishings as required by Retro Fitness. Franchisees typically obtain third-party financing for the purchase of these items.
  • The range in the chart reflects the estimate of the down payment you may be required to make to the third-party financing institution, which generally represents 20% of the total cost for equipment and furnishings.
  • If you elect to pay for the equipment and furnishings in full before you begin operations, the estimated total cost for the equipment and furnishings ranges from $425,000 to $625,000.
  • Franchisees do not typically pay for these items without the aid of third-party financing prior to opening.
  • A typical Retro Fitness Outlet contains 45 to 60 cardiovascular machines equipped with LCD TVs, 74 pieces of circuit training and free weight training equipment, and 1 to 2 stand-up tanning units.
  • The franchisor recommends pre-ordering equipment 14 weeks before the planned opening date to allow time for delivery and installation. A list of the typical equipment you will buy is included in the Operations Manual.
  • Other furnishings include basic office furniture and equipment, such as a desk, chairs, bar stools, a fax machine, and telephones. Most Retro Fitness Outlets have 3 computers.

9.  Prepaid Rent and Security Deposit:  $0 to $75,000

10.  Lease Review Fee:  $1,750

11.  Leasehold Improvements/Fit Out:  $660,000 to $1,170,000

  • The cost of leasehold improvements is dependent on the condition of the leasehold site when you (the tenant) take possession and/or how much the landlord’s contribution to leasehold improvements may be, and this varies from location to location.
  • Some landlords may agree to do “rough plumbing,” or sheetrock all the exterior walls (vanilla box). In that case, the additional leasehold improvements that you would be paying for, at a minimum, would be as follows:
  • 2 locker rooms (30-40 lockers for each room)
  • 3 showers for each locker room
  • 2 toilet fixtures for each locker room (men’s room: 1 urinal, 2 toilets)
  • 2 sinks for each locker room
  • juice bar area requires a hand sink, a triple basin sink, and 1 ice machine hook up
  • 1 mop sink
  • rubber flooring throughout the exercise areas; VCT and carpet elsewhere
  • construction of the front desk/reception area, including juice bar area (for the preparation of health shakes and smoothies)
  • construction of 1 to 3 rooms of at least 600 square feet each to be used as classrooms or offices
  • The estimated costs of construction and outfitting for a new Retro Fitness Outlet are based on a model build-out of approximately 12,000 to 18,000 square feet.

12.  Utility Deposits:  $0 to $3,500

13.  Licenses and Permits:  $500 to $5,000

14.  Fictitious Name Registration and/or Incorporation and Legal Review:  $250 to $1,500

15.  Travel, Lodging, Meals, Etc. for Initial Training:  $0 to $3,500

  • Training for up to 20 people is included in the franchise fee. Additional persons may attend initial training for a $500 per person fee.

16.  Miscellaneous Start-Up Costs:  $2,000 to $5,000

17.  Additional Funds (working capital to cover 3 months of expenses such as payroll, utilities, and advertising during early stages of operation, until cash flow builds up):  $75,000 to $300,000

  • The Additional Funds category also includes estimates for the first three months of equipment financing payments. These expenses do not include owner’s salary or draw.

18.  Total:  $941,350 to $1,892,250

  • The amounts above are estimates only. Your individual costs and expenses may vary depending on numerous factors, including the size of your Retro Fitness Outlet, location, ability to negotiate rent, leasehold improvements, and other factors that are outside of the franchisor’s control. The franchisor cannot, and does not, guarantee that your costs will fall within the stated ranges.
  • The franchisor has relied on its experience in the fitness business, its affiliates’ and principals’ experience in the nutrition and fitness business, its predecessor Retro Fitness Corp.’s experience, and franchised facilities currently operating or under construction to compile these estimates.
  • If your Outlet is located in one of the New York City Boroughs or in other metropolitan markets, your estimated initial investment expenses will likely be significantly higher than the ranges stated in this Table.
  • Costs are constantly changing and your costs may be higher. You should diligently investigate all potential costs before proceeding.

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