Franchise Costs: Detailed Estimates of Pure Barre Franchise Costs (2019 FDD)

Updated May 27, 2019.

Detailed Estimates of Pure Barre Franchise Costs Based on Item 7 (Estimated Initial Investment) of Pure Barre’s 2019 Franchise Disclosure Document

1.  Initial Franchise Fee:  $60,000

2.  Training-Related Expenses (Owner/Operator and/or Designated Manager Module):  $500 to $3,000

• These are estimated costs (for example, any costs of travel and accommodations for yourself and your employees) that you will incur in connection with you and/or your Designated Manager to attend the appropriate initial training module prior to opening.

• The training fees and costs associated with your Authorized Instructors attending and completing the Pure Bare Classic Training and Additional Instructor Training is accounted for in the “Instructor Training and Related Expenses” item below, and is not accounted for in this range.

3.  Real Estate/Lease:  $7,000 to $33,500

• If you do not own adequate Studio space, you must lease suitable premises. These figures assume that the leased premises will be approximately 1,500 square feet in size. The figures assume a base monthly rental rate estimated in the range of $1.17 per square foot to $5.58 per square foot.

• Landlords may also vary the base rental rate and charge rent based on a percentage of gross sales.

• In addition to base rent, the lease may require you to pay common area maintenance charges (“CAM Charges”), your pro rata share of the real estate taxes and insurance, and your pro rata share of HVAC and trash removal.

• You may also be required to pay a security deposit equal to a month’s rent.

• The estimate covers the first 3 months of operation, and 1 month’s rent as a security deposit.

4.  Leasehold Improvements:  $20,000 to $185,000

• This estimated range also assumes that your Studio will be around 1,500 square feet in size. Studios are typically approximately 1,500 square feet, and this figure represents Pure Barre’s estimate of your cost to build-out and decorate your Studio to Pure Barre’s System standards within that space.

• You must adapt Pure Barre’s prototypical plans and specifications for the construction and finish-out of the Studio, including approved flooring, mirrors, and paint.

• For clarity, this estimated range assumes a negotiated tenant improvement that is, in part, based on (a) the experience of Pure Barre’s affiliate-owned locations and operating franchisees, and (b) the experience of Pure Barre’s sister franchisors and their respective franchisees when selecting sites.

• Pure Barre’s affiliates have been able to negotiate tenant improvement concessions in some cases of up to $50 per square foot, but Pure Barre assumed a concession of $33 per square foot for purposes of this estimate.

• Please note that if you are developing a Studio in one of the boroughs that comprise New York City, this item can be as high as $505,000 because of higher labor and logistics costs and other factors.

5.  Signage and Graphics:  $15,000 to $20,000

• You will need to purchase appropriate signage for your Studio that Pure Barre approves. Each landlord has different restrictions it places on interior and exterior signage that may affect your costs.

6.  Insurance:  $900 to $1,000

• This estimate is for 3 months of your minimum required insurance. The actual cost may be more than shown here.

• Pure Barre’s experience is that, if you are developing a Studio in one of the boroughs that comprise New York City, this item can be as high as $10,000.

7.  Specialty and Other Exercise Equipment:  $3,000 to $7,000

• The initial required amount of barre-related and other exercise equipment for a standard Studio is approximately mats, balls, tubes, weights, and smaller pieces of related exercise equipment, although Pure Barre may raise or lower this requirement depending on the size of your Studio, which is included in the Initial FFE Package you must purchase from Pure Barre.

• Financing for the equipment may be available. If you chose to finance the equipment, your initial costs will be less than the range provided here; however, your overall payments may be higher.

8.  Opening Inventory:  $15,000

• This range estimates the amount you will expend to purchase an initial stock of certain proprietary inventory items that Pure Barre (or its Approved Supplier) will compile and supply to you prior to opening, including the Opening Inventory Package.

9.  Utility Deposits:  $0 to $1,000

10.  Licenses and Permits:  $0 to $3,000

• This estimated range covers the expense to acquire the required local business licenses and permits. Pure Barre makes no representations or assurances as to what (if any) licenses, permits, authorizations, or otherwise may be required in connection with your Studio.

• Pure Barre’s estimated costs include building permits, fire inspection, sales tax permit, and retail sales permits.

• Pure Barre’s experience is that, if you are developing a Studio in one of the boroughs that comprise New York City, this item can be as high as $58,000 because of higher labor and logistics costs and other factors.

11.  Furniture, Fixtures, and Related Supplies:  $16,000 to $21,000

• This is a range of expenses that will be incurred when decorating and furnishing the Studio. This includes the furniture, fixtures, and certain related supplies that will be supplied as part of the Initial FFE Package you must purchase from Pure Barre.

• You are required to have at least 1 surveillance camera installed in the Studio. You may be required to purchase the camera(s) and related accessories from an Approved Supplier. The camera(s) must be web accessible. You will use the camera to monitor teacher performance, quality assurance, and safety. Pure Barre has an absolute right to also review and monitor the camera(s) for the same purposes as you, and to ensure compliance with the System.

• Both the low-end and the high-end numbers represent a straight purchase of all furniture, fixtures, and related supplies (rather than leasing or making installment payments on these items).

12.  Audio/Visual Equipment, Including Computer System:  $14,500 to $18,500

• You must purchase these items from Pure Barre’s Approved Supplier.

13.  Shipping:  $1,000 to $4,000

14.  Pre-Opening Marketing:  $15,000

• You will be required to expend a minimum of $15,000 on advertising and promoting the opening of your Studio, including amounts that you will be required to expend on your “Opening Support Program” designed to generate Studio clientele prior to your opening.

• Pure Barre may require that you expend all or some portion of these funds on materials or services that are provided by its then-current Approved Supplier(s) for the Opening Support Program components and/or any other advertising or marketing, and Pure Barre expects that you will typically expend these amounts primarily in the month(s) immediately preceding and following the soft opening of your Studio.

15.  Instructor Training and Related Expenses:  $8,750 to $22,250

• You will be required to ensure that each of your initial Authorized Instructors (a) attends and completes the Pure Barre Classic Training prior to the opening of your Studio, and (b) each Authorized Instructor completes the Additional Instructor Training within 12 months of when the Pure Barre Classic Training is completed in order to continue to provide the Approved Services from your Studio.

• Consistent with Pure Barre’s standard franchise offering, Pure Barre assumes for this range that you will ensure that 7 total individuals complete the Pure Barre Classic Training and that all then-current training fees (currently, $1,750/trainee) are paid for such training, while the high end assumes that you may send up to 2 of your Authorized Instructors to complete Additional Instructor training during your initial ramp-up period.

16.  Additional Funds – First 3 Months:  $15,000 to $30,000

• This is an estimate of certain funds needed to cover your business (not personal) expenses during the first 3 months of operation of the Studio. These expenses include initial employee wages, management compensation (but not any draw or salary for you), ongoing purchases of equipment and supplies, continuing improvement of the Studio’s physical features, utilities, repairs, and maintenance.

• This estimate is based on the experience of Pure Barre and its affiliates in owning and operating Studios for more than 10 years, as well as the experience of its (a) franchisees, and (b) affiliate franchisors’ experience with their respective brands.

17.  Total:  $191,650 to $439,250