Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
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FDD Talk 2013: Pro Forma Notes and Assumptions for Look Good Naked Boot Camp Businesses (2013 FDD)

by Franchise Chatter on December 3, 2013

in Fitness Franchises, Franchise Earnings

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Highlights of Look Good Naked Boot Camp’s Item 19 Financial Performance Representations (2013 FDD) – Part 2

Additional Notes and Assumptions for Part 1 – Statement of Annual Projected Gross Sales and Earnings

  • Gross Sales.  The franchisor rounded all Gross Sales and expenses to the nearest $10 (except amounts you pay to the franchisor or its affiliates or the estimated rebate you will receive.)
  • Look Good Naked Boot Camp Photo 3Enrollment Fees.  You may charge an enrollment fee to clients in your Training Session (usually up to $99), but in making these projections, the franchisor assumed no enrollment fees would be collected. The addition of an enrollment fee may increase your Gross Sales.
  • Training Session Gross Sales.  In projecting Training Session Gross Sales, the franchisor used an average of $15 per person per hour, based on averages obtained from locations operated by its owners, excluding fees charged by Corporate Locations.
  • The amount you charge per client per hour may vary significantly depending on the location, the average income in your area, the rates of the competition, and the number of clients you have per Training Session per quarter.
  • Other Gross Sales.  You will have opportunities to sell clothing and supplements, as well as offer other services like phone coaching and grocery tours. Margins on clothing and supplements will vary depending on where you choose to order your products from.
  • Total Gross Sales.  Because Minnesota does not tax services, the franchisor assumed there would be no tax on the services you offer. If, however, the state you operate your Business in taxes services, the franchisor assumes you will collect the required taxes and pay the same to taxing authorities, but this amount will not impact your total Gross Sales or expenses.
  • LGN Royalty.  The Royalty Fee is fixed at 20% of Gross Sales. Quality and Development Target Rebates are reflected after the Expenses.
  • LGN National Advertising Fund.  The National Advertising Fee is based on the franchisor’s current requirement that you contribute $15 per month to the National Advertising Fund.
  • Marketing Costs.  Marketing will vary from location to location, often depending on how well networked the franchisee or personal trainer is for the program and also how large of a sales goal you want to attain. The franchisor estimates that you’ll spend 1%-5% of Gross Sales on marketing efforts, including but not limited to yard signs, door hangers, flyers, direct mail, brochures available to current clients, and business cards.
  • Print Material.  Print material will vary as well. The print material estimate is for “completion of the Training Session award” for clients, data/weigh-in sheets, handouts, and various other materials given to clients or prospective clients.

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