This post was updated on October 23, 2016 to reflect information from TITLE Boxing Club’s 2016 FDD (Item 7).
Detailed Estimates of TITLE Boxing Club Franchise Costs Based on Item 7 (Estimated Initial Investment) of TITLE Boxing Club’s 2016 Franchise Disclosure Document
1. Initial Franchise Fee: $35,000
- The initial franchise fee is $35,000. The initial franchise fee is reduced to $29,000 for each Franchise Agreement that franchisee simultaneously signs for the development of three or more Fitness Facilities or when franchisee signs an Area Development Agreement to develop and open three or more Fitness Facilities.
2. Standard Initial Package: $67,456 to $89,027
- The cost of the Standard Initial Package ranges from $67,456 to $89,027, depending on the square footage of your Fitness Facility and the extent of the equipment required for your Fitness Facility, of which $45,000 must be paid within 30 days after you receive site approval and the remaining balance due must be paid before the Standard Initial Package is shipped to you.
3. Sales Tax on Standard Initial Package: $0 to $10,000
4. Delivery for Standard Initial Package: $1,000 to $12,000
- The franchisor reserves the right to collect sales tax and charge you the Setup Fee and additional amounts for the costs of handling and delivery of the Standard Initial Package, none of which are included in the $67,456 to $89,027 cost for the Standard Initial Package. The actual cost of delivery of the Standard Initial Package may vary based on distance to your location from Olathe, Kansas and Lenexa, Kansas.
- You may also incur costs for the installation of the Standard Initial Package depending upon whether or not you provide your own labor or you hire a third-party installation team.
5. Software License Fee: $400
6. Initial Training Fee: $5,000
7. Travel and Living Expenses While Training: $2,500 to $5,000
- You and your general manager of your Fitness Facility must attend and successfully complete, to the franchisor’s satisfaction, a one-week (five business days) initial training program at the Fitness Facility operated by the franchisor’s affiliate in Overland Park, Kansas.
- The cost for the training program is $5,000. In addition, you must pay all wages, costs of travel, lodging, and other living expenses incurred by you and your general manager.
- Additionally, you must attend and successfully complete, to the franchisor’s satisfaction, a two-day Launch Training in Overland Park, Kansas. You must pay all wages, costs of travel, lodging, and other living expenses incurred by you in attending the launch training program.
8. Leasehold Improvements: $0 to $120,000
- TITLE Boxing Clubs are typically located in commercially zoned shopping areas. Due to the costs of land acquisition and new construction, the franchisor expects you will lease the premises. Your actual leasehold improvement costs cannot be estimated with complete accuracy and the range of costs can vary greatly.
- The average size of Fitness Facilities for the most recent 15 leases signed by franchisees, as of the date of the disclosure document, was 3,400 square feet, with three walls, one wall of windows, and an appropriate layout for a standard 40 bag stand.
- The typical size of Fitness Facilities must accommodate a minimum of 30 bags to a maximum of 40 bags, and square footage in a range from approximately 2,300 sq. ft. to 3,400 sq. ft.
- Your costs will vary depending on the status of the premises at the time you begin your improvements and whether your landlord will pay any of the costs of improvements. Some franchisees are able to negotiate the costs of tenant improvements with landlords which provide that the landlord will pay some or all of those costs.
9. Architectural and Engineering Services: $7,500 to $12,000
10. Signage: $5,000 to $10,000
- Includes purchase and installation of signage and may vary by marketplace.
11. Additional Fees: $500 to $2,000
12. Security Deposits: $5,000 to $11,000
- This estimate includes the costs of your security deposits and utilities. These are only estimates and will vary depending on the area of your Fitness Facility. These deposits may be refundable.
13. Rent (3 Months): $0 to $30,000
- Rent should be from $0 to $10,000 a month for the first three months of your lease. You may be successful in negotiating zero rent for the first three months of your lease with your landlord.
14. Business Equipment: $1,000 to $2,000
15. Office Supplies: $500 to $2,000
16. Training Materials: $0 to $500
17. Business Licenses: $500 to $3,000
18. Insurance – 3 Months: $1,500 to $2,500
19. Music Licensing Fee: $400 to $800
- You may be required to acquire licensing rights from the designated third-party music vendor and pay periodic licensing fees to that vendor. The music licensing fee will cost approximately $400 to $800 per year. Failure to obtain such licensing rights is a material breach of the franchise agreement.
20. Site Selection Assistance/Consulting: $0 to $2,000
21. Additional Funds – 3 Months: $20,000 to $40,000
- This estimates your initial expenses for three months from the date you open for business. These expenses include marketing and payroll costs. These figures are estimates and the franchisor cannot guarantee that you will not have additional expenses starting the business.
22. Total: $143,256 to $394,227
- To compile these estimates, the franchisor relied on the experience of its affiliate and its experience assisting other franchisees who have previously opened Fitness Facilities.