Fyzical Therapy & Balance Centers Franchise Costs: Estimated Initial Investment (Item 7, 2023 FDD)

1. Initial Franchise Fee: $49,000

If you opt to open 1 Center, you will pay Fyzical an initial franchise fee of $49,000 for your Center. However, if you enter into 2 or more Franchise Agreements concurrently to open 2 or more Centers (i.e., you enter into 2 or more Franchise Agreements at the same time), you will pay Fyzical an initial franchise fee of $49,000 for the first Center, $35,000 for the second Center, and $20,000 for the third and each additional Center.

If you agree to open and operate at least 5 Centers pursuant to a Development Rights Rider, you will pay Fyzical (at the time you sign your initial Franchise Agreement) a development fee equal to $49,000 (the initial franchisee fee for the first Center) plus $49,000 for each additional Fyzical Center to be developed.

If you are an existing Fyzical franchisee and meet all of Fyzical’s criteria for franchisee approval, Fyzical may finance up to 80% of the initial franchise fee.

2. Training Expenses (including reasonable food, lodging, and travel – per person): $1,750 to $5,000

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You may not incur these expenses if Fyzical chooses to provide training virtually.

3. Lease Deposit and Rent: $4,000 to $15,000

The expense of leasing will vary depending upon the size of the premises of your Center (average size ranges from 1,200 square feet to 2,200 square feet but may be smaller or larger depending on the type of your Center), its location, landlord contributions, and the requirements of individual landlords.

Generally, the rent will range from $5 to $35 per square foot, although your actual rent may vary significantly above or below this range depending on your area and the local market conditions.

Landlords typically require security deposits equal to 1 or 2 months’ rent and may, in addition, require payment in advance of the first and/or last (or more) month’s rent. The total estimated initial investment shown below includes 3 months’ rent.

Some franchisees may prefer to own their Center. The costs of purchasing a Center vary so widely that Fyzical cannot reasonably estimate the cost.

4. Build Out and Improvements: $64,000 to $220,000

The leasehold improvements and build-out costs amount mentioned above may vary widely based upon a number of factors, including the location of the Center, the size and condition of the premises, whether or not there are any existing leasehold improvements, and whether the landlord will contribute to the cost of the improvements.

5. Security System: $500 to $2,000

Fyzical does not require that Fyzical Centers have a security system, but Fyzical does recommend that you have one.

6. Computer System: $1,000 to $3,000

7. Furniture, Fixtures, and Equipment: $15,000 to $50,000

8. Signage, Branding, Design: $500 to $15,000

9. Grand Opening Advertising: $1,000 to $5,000

10. Utility Deposits, Business Licenses, and Other Prepaid Expenses: $1,000 to $5,000

11. Insurance (12 months): $3,000 to $5,000

The estimated cost of insurance coverage required by the Franchise Agreement will vary significantly based on your location and the claims experience of commercial businesses in the area, as well as your claims experience in other businesses you operate.

12. Miscellaneous Opening Costs: $1,000 to $5,000

13. Additional Funds (5 months): $25,000 to $50,000

Fyzical is not aware of any established longer “reasonable period” for its industry, so its disclosures cover a 5-month period. Fyzical relied on its affiliate’s experience operating Fyzical Centers to compile these estimates.

These amounts are minimum recommended levels to cover operating expenses, including employee salaries, for 5 months. You may require additional working capital if your sales are low or if your fixed costs are high.

The estimate for Additional Funds assumes that either your Operating Principal is a Licensed Professional or you or at least one of your owners who is a Licensed Professional will be involved in the day-to-day operation of your Center.

14. Total Estimated Initial Investment: $166,750 to $429,000

The estimate for Additional Funds assumes that neither your Operating Principal nor you or any of your owners are Licensed Professionals. Therefore, you will need additional funds to hire a Clinical Director to perform services at your Center.