This post was updated on September 19, 2017 to reflect information from Farrell’s eXtreme Bodyshaping’s 2017 FDD.
Detailed Estimates of Farrell’s eXtreme Bodyshaping Franchise Costs Based on Item 7 (Estimated Initial Investment) of Farrell’s 2017 Franchise Disclosure Document
1. Initial Franchise Fee: $30,000
- The initial franchise fee for a Farrell’s Center is $30,000.
- If you sign the Development Rights Agreement, the franchisor will apply $10,000 of the Development Fee towards the initial franchise fee owed under each franchise agreement that the Development Rights Agreement covers. The initial franchise fee under each of those franchise agreements is $20,000.
2. Training Expenses: $10,000 to $20,000
- There is no fee for the initial training program. The figures in the chart represent the estimated costs if you and your personnel temporarily relocate to Des Moines, Iowa for about 6 months to complete the Farrell’s eXtreme Bodyshaping course as a student and undergo all of the initial training.
3. Start-Up Marketing Program: $15,000 to $25,000
4. Real Estate Services and Costs (including 3 months’ rent): $17,500 to $29,000
- This estimate includes costs related to site evaluation, selection, lease negotiation, and 3 months’ rent for the Center.
- At the franchisor’s option, you may be required to use a third-party supplier of site evaluation, leasing, and related services that it designates (a “Real Estate Consultant”) to assist you with site selection and lease-related activities for the Center’s location. In that case, and if applicable, you must pay all costs or charges that the Real Estate Consultant separately imposes for providing services.
- A standard Farrell’s Center occupies approximately 3,500-5,000 square feet of space. The typical location for a Farrell’s Center is a strip center in a suburban area.
5. Security Deposit: $5,000 to $10,000
- This estimate includes a security deposit equal to approximately one month’s rent. A landlord might require you to pay a security deposit that is more than one month’s rent.
6. Construction and Leasehold Improvements: $0 to $150,000
- The estimate is to improve a 3,500 square foot property and includes amounts for construction, remodeling, fixed assets, leasehold improvements, and decorating costs. This figure includes the costs of general contractors and licensed tradesmen to install electrical and plumbing fixtures.
- Your costs might be more or less than this estimate depending on where you plan to operate your Center.
- The landlord will often cover some, and in some cases might cover all, of these improvement costs, and the low-end estimate of $0 assumes the landlord would cover all of these costs. However, the landlord normally will factor these allowances into your rent.
7. Furniture, Fixtures, and Equipment: $10,000 to $28,000
- This includes items like gym flooring and equipment, ceiling fans, mirrors, a boxing ring, mats, ropes, strength training bands, office furniture, and 3 months of required software licenses for the Computer System.
8. Signage (Interior and Exterior): $10,000 to $15,000
9. Opening Inventory and Supplies: $2,000 to $5,000
- This includes costs for an initial inventory of items for your Center’s pro shop and an initial supply of Course manuals. It also includes amounts for various office and cleaning supplies.
10. Insurance: $500 to $1,000
11. Licenses: $100 to $1,000
12. Miscellaneous Expenses: $5,000 to $40,000
- This includes costs for professional fees, utility deposits, and other organizational and pre-paid expenses.
13. Additional Funds – 3 Months: $5,000 to $10,000
- This estimates the funds needed to cover your initial expenses for the first 3 months of operation (other than the items identified separately in the table). It includes payroll costs but not any draw or salary for you.
- This is only an estimate, and you might need additional working capital during the first 3 months you operate your Center and for a longer time period after that.
14. Total Estimated Initial Investment: $111,100 to $364,000
- The franchisor relied on its principals’ experience developing and operating similar businesses in Iowa since 1989 to compile these estimates (including the estimate of additional funds).