Detailed Information on TITLE Boxing Club’s Initial Franchise Fee, Royalty Fee + 16 Other Fees (Items 5 and 6, 2023 FDD)
1. Initial Franchise Fee: $29,900 to $49,500
- You must pay TITLE Boxing Club an initial franchise fee in a lump sum. Its standard initial franchise fee is $49,500, which must be paid to it at the time you sign your Franchise Agreement.
- The initial franchise fee is reduced to $39,750 per Franchise Agreement if you sign Franchise Agreements for two Fitness Studios at the same time or if you enter into an Area Development Agreement to develop two Fitness Studios.
- Additionally, the initial franchise fee is reduced to $33,167 or $29,900 per Fitness Studio if you sign an Area Development Agreement for three or five Fitness Studios, respectively.
2. Initial Area Development Fee: $29,900 to $39,750 per facility to be developed (to be credited toward the initial franchise fees)
- If you qualify, you may sign an Area Development Agreement under which TITLE Boxing Club will grant you the right to develop a certain number of Fitness Studios in a designated area according to a Development Schedule attached to the Area Development Agreement.
- According to the Area Development Agreement, if you agree to open two Fitness Studios, you must pay TITLE Boxing Club an initial area development fee of $39,750 per Fitness Studio.
- If you agree to open three or four Fitness Studios, you must pay TITLE Boxing Club an initial area development fee of $33,166 per Fitness Studio to be developed at the time you sign the Area Development Agreement.
- If you agree to open five or more Fitness Studios, you must pay TITLE Boxing Club an initial area development fee of $29,900 per Fitness Studio to be developed at the time you sign the Area Development Agreement.
- The area development fee applicable to each Fitness Studio will be credited toward the initial franchise fee due under the Franchise Agreement for each Fitness Studio that you open.
- The initial franchise fee according to the Franchise Agreement and the initial development fee according to the Area Development Agreement are fully earned upon signing of the applicable Franchise Agreement or Area Development Agreement and are not refundable under any circumstance.
- The initial franchise fee and the initial development fee are charged uniformly to all new franchisees and developers, except TITLE Boxing Club offers a $5,000 discount for the first Franchise Agreement signed by an honorably discharged veteran of the United States military that purchases through the VetFran program.
3. Initial Training Fee: $6,000
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- You must pay TITLE Boxing Club a one-time initial training fee in the amount of $6,000 for initial classroom or virtual training for you and your general manager.
- The initial training fee is due at the time you sign the Franchise Agreement or at the time TITLE Boxing Club designates.
- You are prohibited from opening a Fitness Studio until the initial fees described above for that Fitness Studio have been paid by you to TITLE Boxing Club.
4. Royalty Fee: 7.5% of monthly Gross Revenue, subject to a monthly royalty fee adjustment that is calculated based on a required Minimum Performance Standard of $23,000 monthly Gross Revenue in the second year and $29,500 monthly Gross Revenue in the third year and in each subsequent year multiplied by 7.5%
- When payable: Collected weekly through TITLE Boxing Club’s approved payment processing supplier.
- “Gross Revenue” includes all revenue from the operation of the Fitness Studio.
- The Royalty Fee compensates TITLE Boxing Club for your right to use its System and Licensed Marks in accordance with the Franchise Agreement.
5. Brand Creative Fund Contribution: currently you must contribute 1% of your Gross Revenue to the Brand Creative Fund
- When payable: Collected weekly through TITLE Boxing Club’s approved payment processing supplier.
- TITLE Boxing Club has the right to require you to increase the amount of contributions to the Brand Creative Fund, but in no event will you be required to contribute more than 2% of Gross Revenue to the Brand Creative Fund.
- You must contribute 1% of Gross Revenue to the Brand Creative Fund upon commencement of the operation of your Fitness Studio.
- TITLE Boxing Club may increase the amount you must contribute to the Brand Creative Fund upon written notice to you in an amount not to exceed 2% of Gross Revenue.
6. Local Advertising: $2,500 per month, for local advertising and public relations activities, until the first anniversary of opening your Fitness Studio. Thereafter, the minimum monthly expenditure shall be $2,000.
- When payable: Paid monthly by you for local advertising.
- If requested, you must furnish proof of local advertising expenditures to TITLE Boxing Club.
- Any deficiency in local marketing by you must be contributed to the Brand Creative Fund.
7. Regional or Local Advertising Cooperative: minimum of $1,500 and maximum of $3,000 per month as determined by Cooperative; subject to increase upon unanimous vote of all members of the Cooperative
- When payable: Paid monthly.
- Contributions to the Cooperative are credited to your obligation to spend a minimum in local advertising.
8. Transfer: $10,000
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- When payable: Before the date of closing of the transfer of the Franchise Agreement or Area Development Agreement.
- Paid if you assign or transfer the rights to the Area Development Agreement or Franchise Agreement or make other specified transfers to someone other than an entity controlled by you or to your immediate family member.
9. Related Party Assignment Fee: first assignment is free and each subsequent assignment is $500
- When payable: 10 days after billing.
- Paid only if you assign your Area Development Agreement or Franchise Agreement to an entity controlled by you or to your immediate family member.
- This fee would cover TITLE Boxing Club’s administrative costs.
10. Supplemental Training Fee: currently, $400 per day, plus TITLE Boxing Club’s out-of-pocket expenses including travel, lodging, and meals
- When payable: Within 10 days of billing.
- This fee applies to any training after initial training.
- TITLE Boxing Club will provide you and your employees required additional training, in its discretion or as you request.
- You must pay TITLE Boxing Club its then-current supplemental training fee plus reimbursement of its expenses for providing such supplemental training, including costs of transportation, meals, and lodging for its employees or representatives providing such training.
- TITLE Boxing Club will not require such training more than once per year unless you are in default.
- This amount may change, but will not exceed $1,000 per day.
11. Renewal: $10,000
- When payable: At the time you request renewal.
- You must give TITLE Boxing Club written notice of your election to renew the Franchise Agreement not less than 7 months nor more than 12 months before the end of the initial term.
12. Relocation: $5,000
- When payable: At the time relocation is requested.
- Paid only if you request relocation of your Fitness Studio.
13. Technology Fee: currently, $349 per month
- When payable: Upon provision of services either by electronic funds transfer or retained from Gross Revenue generated from online scheduling transactions; net amount remitted to you on a monthly basis.
- You must pay TITLE Boxing Club, its designee(s), or approved vendor(s), the then-current monthly Technology Fee which is currently $349 a month. TITLE Boxing Club reserves the right to adjust this fee from time to time.
- Some technology services may be required in the future which are not covered by this fee.
14. Interest: greater of 1.5% per month or 3% over prime rate per annum, not to exceed maximum allowed by law. The maximum interest rate in California is 10% annually.
- When payable: 30 days after billing.
- Interest is charged on any unpaid royalty, advertising, transfer, and other fees not received by the date due.
15. Audit: delinquency of royalty and advertising contributions, plus interest from the date due. In addition, if there is an understatement of Gross Revenue which exceeds 2%, you must pay the cost of the audit.
- When payable: Within 15 days after receipt of the audit report.
- Interest is due if there is an understatement in the royalty and advertising contributions.
- You must pay the cost of the audit if understatement of royalty and advertising contributions exceeds 2% of Gross Revenue for the previous 12 months.
16. Public Offering Fee: $3,500
- When payable: At the time you request review of public or private offering.
- Paid to TITLE Boxing Club for costs associated with review.
17. Liquidated Damages: three times the greater of (i) royalty fees and other fees which became due to TITLE Boxing Club from you during the 12 months immediately preceding such termination of the Franchise Agreement and (ii) the Minimum Royalties that would be due under the applicable Performance Standards for the 12 months immediately after such termination
- When payable: Within 15 days after termination of the Franchise Agreement by TITLE Boxing Club for cause.
- If the Franchise Agreement is terminated, you agree to pay TITLE Boxing Club liquidated damages.
18. Management Fee: 8% of the Gross Revenue of your Franchised Business during the period of time TITLE Boxing Club or its representative manages your Franchised Business on your behalf (the “Management Fee”), plus the costs and expenses it incurs
- When payable: As incurred.
- The Management Fee will only be due to TITLE Boxing Club if (a) you are in material default under your Franchise Agreement or become disabled (and unable to perform as the “Franchisee” under your Franchise Agreement), and (b) it exercises its right to temporarily operate your Franchised Business in an effort to assist in getting the operations of the Franchised Business back into compliance with the Franchise Agreement and System standards.
If you are looking for information on the estimated initial investment for a TITLE Boxing Club franchise, check out this post: Franchise Costs: Detailed Estimates of TITLE Boxing Club Franchise Costs