Fyzical Therapy and Balance Centers Franchise Costs (2016 FDD)

Detailed Estimates of Fyzical Therapy & Balance Centers Franchise Costs Based on Item 7 (Estimated Initial Investment) of Fyzical Therapy & Balance Centers’ 2016 Franchise Disclosure Document

1. Initial Franchise Fee: $60,000 to $120,000

The initial franchise fee is $1.50 per person based on the population in the Territory and is based on a minimum of one Territory.

A “Territory” is a geographic area that contains a population of approximately 40,000 people and comprises an area encompassing a complete zip code; no areas comprising less than a full zip code.

The low estimate is based on a Territory population of 40,000 people and the high estimate is based on a Territory population of 80,000 people.

If you meet certain credit requirements, the franchisor may finance up to 90% of the initial franchise fee, but not in excess of $108,000 (90% of $120,000). The minimum down payment is the greater of 10% or $6,000.

The annual interest rate ranges from 8% to 12% depending on the length of term and can be paid over a 12 to 36 month period of time.

The monthly payments for a loan of $60,000 less 10% down payment ($60,000 – $6,000 = $54,000) at 12% interest paid over a 36-month period would be $1,793.57 per month.

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

3. Lease (Rental Amount): $5,000 to $20,000

The low end assumes that you own your premises. The expense of leasing will vary depending upon the size of the premises (average size ranges from 1,200 square feet to 6,500 square feet but may be smaller or larger depending on your circumstance), 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 in the chart includes 1 month’s security plus 3 months’ rent.

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

4. Build Outs and Improvements: $10,000 to $100,000

The leasehold improvements and build-out costs vary widely based upon a number of factors, including 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 $2,500

The franchisor does not require Centers to have a security system, but it 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: $500 to $6,000

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): $7,000 to $13,500

The estimated cost of insurance for the policies 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 (3 Months): $25,000 to $35,000

The franchisor relied on its affiliate’s experience operating a Fyzical Center in Sarasota, Florida to compile these estimates. These amounts are minimum recommended levels to cover operating expenses, including employee salaries, for 3 months.

The franchisor cannot guarantee that this amount is sufficient. You may require additional working capital if your sales are low or if your fixed costs are high.

14. Total Estimated Initial Investment: $128,750 to $370,000

In compiling these estimates, the franchisor relied on its affiliate’s experience in operating a Fyzical Center.