Detailed Estimates of Jazzercise Franchise Costs Based on Item 7 (Estimated Initial Investment) of Jazzercise’s 2014 Franchise Disclosure Document
For Franchisees Who Do Not Lease Commercial Facilities
- All figures in Item 7 are estimates only. Actual costs will vary for each franchisee depending on a number of factors.
1. Initial Franchise Fee: $2,000
- The initial franchise fee is $2,000.
- Occasionally, a franchisee who resigned is recertified more than 12 months after the resignation. If this applies to you, your recertification fee is $1,000 when you sign the Franchise Agreement.
- In addition, if someone who has been an employee of Jazzercise for at least 90 days becomes a franchisee who owns classes, the initial fee is $1,000
2. Travel and Living Expenses While Training: $0 to $1,000
3. Real Estate and Improvements: Amount Not Specified
- If you enter into a lease agreement with a community center or other facility for the conduct of your business, in most instances, the rent required will be a percentage of gross customer enrollment fees, and no initial rent or deposits will be required.
- The percentage rent required by facilities can vary from no cost to 35% or from $10 to $50 per class session.
- Jazzercise recommends negotiating for 25% of gross customer enrollment fees for rent, utilities, and maintenance.
- Occasionally, a franchisee will be required to make a lease deposit which may vary.
4. Equipment: $1,750 to $8,000
- You are currently required to purchase audio player(s), a DVD player, and a wireless microphone before beginning to conduct classes. The estimated cost of these items is between $1,750 and $8,000.
- You are also required to purchase audio recordings of each song used with each new routine contained in new routine packets supplied by Jazzercise.
- Jazzercise may change the medium (e.g. digital recording, Internet, or other electronic transmission) by which it transmits new routine packages to you at any time, and this may require you to make additional expenditures for equipment to receive these transmissions such as a computer system that can download music and video files.
- You must also wear a variety of exercise apparel and purchase minimal office supplies. You must also purchase a stage if none is available to you at the facility. You must also purchase a computer system that has the capabilities described in Item 11 to utilize the Jazzercise Franchise Assistant Software (JFAS) in addition to the items and amounts listed here.
- The refundability of the amounts you pay to purchase these items depends on the agreement between you and the supplier.
5. Miscellaneous Opening Costs: $500 to $1,000
- This figure includes the cost of your annual premium for liability insurance coverage which may be obtained through Jazzercise at a current charge that Jazzercise estimates will range from $170 to $220 (but may be higher), or through an insurance company.
- You must obtain workers’ compensation insurance including employer’s liability, if required by law, with limits required by the laws that apply to you, and comprehensive general liability insurance in the minimum amount of $1,000,000, including personal injury, contractual liability, products and completed operations, and professional liability coverage.
- Jazzercise may change these coverage requirements.
- If you obtain liability coverage through Jazzercise, your premium payment is non-refundable. If you obtain liability coverage through an insurance company, the refundability of your premium payment will depend on your agreement with that company.
- You must also obtain Internet access if you do not already have it in order to receive information from Jazzercise via email and in order to access Jazzercise’s website.
6. Opening Inventory: $0 to $1,000
- You are not required to maintain an inventory of merchandise. You are also not required to obtain promotional merchandise, but may wish to do so. Promotional material costs, if any, are included in the estimated cost in this category (Opening Inventory).
- In general, payment for these items is not refundable.
7. Additional Funds – 3 Months: $30 to $650
- You should anticipate purchasing audio recordings at intervals of approximately 2 months at a current cost of approximately $150 if you are purchasing CD’s or approximately $40 if you are downloading music from a website such as iTunes.
- The refundability of these payments depends upon the agreement between you and your supplier.
8. Total: $4,280 to $13,650
- Jazzercise bases its estimates of these expenses on its experience and the experience of its franchisees. These figures are estimates and Jazzercise cannot guarantee that you will not have additional expenses starting the business.
- Your costs will depend on factors such as how much you follow Jazzercise’s methods and procedures; your skill, experience, and business acumen; local economic conditions; the local market; competition; and the number of customers and classes you conduct.
For Franchisees Who Lease Commercial Facilities
- The total estimated initial investment necessary to begin operation of a Jazzercise business (for franchisees who lease commercial facilities) ranges from $10,600 to $76,500.
- Real Estate and Improvements ($5,000 to $50,000). If you choose to lease a commercial facility on your own, either alone or with other franchisees, you will need approximately 1,200 square feet for a small facility and approximately 3,000 square feet for a large facility, and you can expect to be charged current market value rent for your geographic region.
- There may also be additional costs for utility and lease deposits and office furniture and equipment, as well as expenses related to remodeling, leasehold improvements, decorating, and similar costs.
- If you do not rent a facility on your own, you will not have these costs. The refundability of these payments depends upon the agreement between you and your lessor and suppliers.