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Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Blink Fitness Franchise Costs (2017 FDD)

by Franchise Chatter on July 17, 2016

in Fitness Franchises, Franchise Costs

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Project: Blink Clifton Architect: N/A Stylist: Brice Gaillard Location: Clifton, NJ

This post was updated on May 17, 2017 to reflect information from Blink Fitness’s 2017 FDD (Item 7).

Detailed Estimates of Blink Fitness Franchise Costs Based on Item 7 (Estimated Initial Investment) of Blink’s 2017 Franchise Disclosure Document

1.  Initial Franchise Fee:  $40,000

  • The initial franchise fee is $40,000. However, Blink Fitness will reduce the initial franchise fee to $10,000 for each Blink Fitness Gym you develop and open under the Development Rights Agreement, including the first Blink Fitness Gym.
  • Except for the non-refundable development fee, there is no initial investment required to begin operating under the Development Rights Agreement.

2.  Training:  $2,000 to $20,000

  • Although Blink Fitness does not impose a fee for the initial training program, this figure estimates your and your personnel’s costs for travel and other expenses during training.
  • The costs in New York City vary greatly based on the distance you must travel and the time of year and choices you make for hotels, restaurants, etc.

3.  Presale Marketing Budget:  $35,000 to $50,000

4.  Rent, Security Deposit, and Other Real Estate Services and Costs:  Amount Not Specified

  • A standard Blink Fitness Gym occupies approximately 12,000 to 20,000 square feet of space. The typical location is on high-traffic streets in metropolitan or suburban areas.
  • Blink Fitness expects you to rent the Gym’s location. It is possible, however, that you will choose to buy, rather than rent, real estate on which a building suitable for the Gym already is constructed or could be constructed. This initial investment table does not reflect the potential cost of real estate or the costs of constructing a building suitable for the Gym.
  • Blink Fitness or a Site Consultant will assist you by reviewing potential sites for the Gym. However, you will also incur costs related to site evaluation, selection, and lease negotiation.
  • You must use a licensed commercial real estate broker during the site selection process, and Blink Fitness has the right to pre-approve your proposed broker before you move forward.

5.  Leasehold Improvements, Signage, Utility Costs, Furniture, Fixtures, Licenses, and Permits:  $275,000 to $1,555,188

  • The estimate includes amounts for construction, remodeling, fixed assets, leasehold improvements, and decorating costs. This figure is based upon Blink Fitness’s expectation that you will lease your Gym from the landlord in good condition (a “Vanilla Box”).
  • Leasehold improvement costs include floor covering, wall treatment, counters, ceilings, painting, window coverings, electrical, carpentry and similar work, and contractor’s fees.
  • Blink Fitness’s estimates do not include any benefits you might receive from tenant improvement allowances a landlord gives you to retrofit or renovate the site. The lower end of the range assumes the landlord builds out the entire Gym (i.e., “turnkey”); the higher end of the range assumes the landlord does minimal to no work on the site.
  • Your costs might be more or less than these estimates depending on the site’s existing condition and where you plan to operate your Gym.

6.  Deposits, Leases, and Other Down Payments for Fitness Equipment, Fixtures, and Other Fixed Assets:  $125,000 to $175,000

  • This estimate assumes you will lease the cardiovascular, strength, and fitness training equipment; fixtures; and other fixed assets from approved vendors or suppliers. This figure covers your down payment under the lease.
  • If you choose to purchase the equipment for your Gym, Blink Fitness estimates you will pay approved vendors or suppliers $550,000 to $665,000 for such equipment.

7.  Opening Inventory and Supplies:  $20,000 to $35,000

  • This includes costs for an initial inventory of supplies for Gym maintenance, cleaning supplies, key tags, and retail and food and beverage items.

8.  Computer Hardware and Software:  $35,000 to $41,000

  • As described in Item 5, $4,000 of your initial computer hardware and software costs is payable to Blink Fitness for its assistance with configuration services for the technology platforms that your Gym will operate.

9.  Technology and Support Services Fee:  $1,800 to $3,600

  • This includes expenses for proactive monitoring and notification of network and Wi-Fi outages. It also includes expenses for software support for the kiosks, System Website, and POS System; dedicated level 1 help desk support; and vendor issue management and coordination support.

10.  Professional Fees:  $3,000 to $10,000

  • This estimates the costs of professional advisors (like an attorney or accountant) for the initial advice consistent with the start-up of a franchised business. Blink Fitness strongly recommends that you seek professional assistance when evaluating this franchise opportunity and its franchise documents.
  • Your professional advisors also should review the lease and other contracts you sign for your Gym.

11.  Insurance Deposits:  $0 to $10,500

12.  Additional Funds for 3 Months:  $100,000 to $150,000

  • This estimates the funds needed to cover your operating expenses for the first 3 months of operation (other than the items identified separately in the table). These funds could be offset by revenue earned during that period.
  • This is only an estimate, and you might need additional working capital during the first 3 months you operate your Gym and for a longer time period after that.

13.  Total Estimated Initial Investment (excluding real estate costs):  $636,800 to $2,090,288

  • The franchisor relied on the experience of its affiliate-owned Blink Fitness Gyms in New York and New Jersey to compile these estimates (including the estimate of additional funds).

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