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Considering a Sky Zone Indoor Trampoline Parks Franchise? Don’t Overlook These 28 Important Franchise Fees

by Franchise Chatter on November 7, 2016

in Child-Related Franchises, Franchise Fees



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Sky Zone Indoor Trampoline Park by nymetroparents.com

This post was updated on July 17, 2016 to reflect information from Sky Zone Indoor Trampoline Parks’ 2017 FDD.

If you are considering a Sky Zone Indoor Trampoline Parks franchise, don’t get blindsided by these 28 important franchise fees (from the initial franchise fee, to the royalty fee, to 26 other fees found in Items 5 and 6 of Sky Zone Indoor Trampoline Parks’ 2017 FDD).

1.  Deposit:  $20,000

  • When you sign a Letter Agreement with Sky Zone for the operation of a Park under the Single Unit Franchise Program, you must pay Sky Zone a Deposit of $20,000. The Deposit is deemed fully earned upon payment and is not refundable under any circumstances.
  • You must enter into a Franchise Agreement with Sky Zone within 2 weeks of the date you sign your Letter Agreement. If you do not enter into a Franchise Agreement with Sky Zone at that time, Sky Zone reserves the right to terminate your Letter Agreement and retain your Deposit.

2.  Initial Franchise Fee (including the $20,000 Deposit):  $40,000 to $60,000



  • You will be required to pay Sky Zone an initial franchise fee (the “Initial Franchise Fee”) (a) prior to Sky Zone providing you with any design or layout templates or proposals for any site you propose in connection with your Park, or (b) 6 months from the date you execute your Franchise Agreement, whichever occurs sooner (the “IFF Payment Date”).
  • Sky Zone will credit your Deposit to the Initial Franchise Fee provided you timely secure an approved site from which to operate your Park, such that you will owe Sky Zone the balance of $40,000 on the IFF Payment Date.
  • If you wish to enter into a Franchise Agreement with Sky Zone for the right to own and operate an additional Park after you already own and operate 1 or more existing Park(s) pursuant to a valid and existing Franchise Agreement with Sky Zone, then you will only be required to pay Sky Zone a balance of $20,000 on the IFF Payment Date, provided you are not in default of your existing Franchise Agreements with Sky Zone.
  • The entire Initial Franchise Fee is deemed fully earned upon execution of your Franchise Agreement and is not refundable under any circumstances upon payment.

3.  Other Amounts Payable in Connection with a Single Park:  (i) $427,195 to $870,489 payable to Sky Zone’s affiliate, and (ii) $13,849 to $14,029 (not including the Initial Franchise Fee) payable to Sky Zone

  • You must also pay Sky Zone or its affiliates for the Playing Fields equipment and installation, all on-court sports equipment (e.g. balls), jump stickers, SkySocks, SkyBands (equipped with radio-frequency identification or RFID), mobile device applications (SkyApp), and other items Sky Zone designates for use or resale at your Park.
  • Sky Zone and its affiliates are the only approved suppliers for these products and services. The costs of all of these items will range from (i) $427,195 to $870,489 payable to Sky Zone’s affiliate, and (ii) $13,849 to $14,029 (not including the Initial Franchise Fee) payable to Sky Zone. These costs are nonrefundable.

4.  Area Development Agreement:  the sum of (i) $60,000 for the first Park you are granted the right to develop, and (ii) $40,000 for the second and each additional Park Sky Zone grants you the right to develop

  • If Sky Zone determines to grant you the right to develop multiple Parks within a designated Development Area, you will be required to pay Sky Zone a lump-sum development fee amounting to the sum of (i) $60,000 for the first Park you are granted the right to develop, and (ii) $40,000 for the second and each additional Park Sky Zone grants you the right to develop.
  • The Development Fee is paid to Sky Zone upon execution of your LOI for development rights at issue, and this fee is deemed fully earned and nonrefundable upon payment. Please be advised that you will be required to execute the Franchise Agreement that will govern the first Park you open within the Development Area at the same time you execute your ADA for the development rights.

5.  Royalty Fee:  6% of Gross Sales

  • When payable:  Payable twice per month on the 16th and first day after month ends.
  • Payments must be made via electronic funds transfer (EFT).
  • “Gross Sales” means the total amount of all sales of products, services, programs, and merchandise sold from, through, or in connection with the Park, whether for cash, on credit, barter or otherwise, but not including applicable sales, use, or service taxes.

6.  Advertising Fee:  currently, 2% of Gross Sales

  • When payable:  Payable twice per month on the 16th and first day after month ends.
  • Payments must be made via electronic funds transfer (EFT).
  • Sky Zone has the right to increase your Advertising Fee to an amount equal to up to 2.5% of Gross Sales.

7.  Online Marketing Tool Advertising Fee:  then-current fee charged by Sky Zone’s approved or designated supplier. Currently, $20 per month per user.



  • When payable:  Monthly.
  • Sky Zone has a mandatory marketing platform for all approved marketing resources. This fee is charged based on the number of users at a given Park.

8.  Grand Opening Advertising:  minimum of $25,000

  • When payable:  1/2 of this Grand Opening Advertising Amount to be spent before you open your Park and the remainder in the first month your Park is in operation.

9.  Local Advertising:  minimum of $12,000 per month during the second, third, and fourth months of operation; after your fourth month of operation, minimum of 4% of Gross Sales

  • When payable:  Monthly during your second, third, and fourth months of operation; quarterly after your fourth month of operation.
  • Payable to local advertising suppliers.
  • Any advertising materials you want to use must first be approved by Sky Zone.
  • Sky Zone has the right to request that you provide it with invoices and/or other evidence to demonstrate you are making these expenditures.

10.  Transfer Fee Under Franchise Agreement:  50% of the then-current Initial Franchise Fee

  • When payable:  Prior to transfer.
  • Payable by transferee when you transfer your Franchise Agreement, the assets of your Park, or your ownership.

11.  Transfer Fee Under Area Development Agreement:  $25,000 per undeveloped Unit

  • When payable:  Prior to transfer.
  • Payable by you when you sell your area development rights.

12.  Renewal Fee Under Franchise Agreement:  25% of the then-current Initial Franchise Fee

  • When payable:  At the time of execution of the then-current Franchise Agreement.
  • Payable when you renew the Franchise Agreement.

13.  Additional Training:  currently, Sky Zone reserves the right to charge $500 per day

  • When payable:  Upon request or as Sky Zone requires.
  • This is for additional training Sky Zone may periodically provide or require.

14.  Additional Assistance Fee:  currently, $500 per day; subject to Sky Zone’s determination of a reasonable charge

  • When payable:  Upon request or as Sky Zone requires.
  • This is for additional assistance that you need or request.

15.  Cost of Audit:  Sky Zone’s costs and expenses of the audit, including salaries, professional fees, travel, meals and lodging, plus any understated amount with interest

  • When payable:  Upon demand.
  • Payable if audit or review shows an understatement of Gross Sales for the audited or reviewed period of 2% or more.

16.  Interest on Late Payments:  lesser of 18% annually or maximum legal rate Sky Zone is able to charge (e.g. based on where the Park is located) subject to applicable laws

  • When payable:  On all overdue payments.
  • Payable on all overdue amounts. Interest accrues from the original due date until payment is received in full.

17.  Late Report Fee:  $100, plus $100 for each day the report is late

  • When payable:  Upon demand.
  • Payable on your failure to timely send Sky Zone financial reports when due.
  • Sky Zone reserves the right to waive this fee if the report is late due to technical or communications errors.

18.  Testing for Alternate Supplier Approval:  not more than the actual cost of the test

  • When payable:  Upon demand.
  • Only if you propose a supplier to Sky Zone for its approval.

19.  Product Purchases and Installation of Playing Fields:  varies based on the products ordered (e.g. Playing Fields, including installation, balls, stickers, wristbands, and SkySocks)

  • When payable:  As incurred and as set forth in the applicable Purchase Order (a form of which is attached to the Disclosure Document as an Exhibit).
  • Payment must include cost of goods, taxes, shipping, and handling.
  • Yon must purchase certain items such as the Playing Fields (including the nets, padding, and installation), halls, stickers, wristbands, party/event supplies, SkySocks, SkyBands, and other Sky Zone branded items from SkyZone Franchise Group or its affiliates.
  • You may decide to purchase certain other products (such as promotional materials and merchandise) from Sky Zone or its affiliates.
  • The prices, terms, and conditions for these purchases are contained in the price list that Sky Zone or its affiliates will periodically supply to you (“Price List”). Sky Zone reserves the right, for itself and its affiliates, to update the Price List and change the terms and conditions for these purchases at any time on 30 days’ notice.
  • All of the individuals who guarantee the Franchise Agreement must also guarantee all of your purchases of products and equipment from Sky Zone or its affiliates.
  • You must pay for all taxes, shipping, and handling costs.
  • If you fail to pay for any products or equipment when payment is due, Sky Zone or its affiliates can require you to pay for future products and/or equipment on a cash on demand basis or withhold shipment of products and/or equipment in addition to requiring you to pay late fees and interest.

20.  POS-Related Fees:  then-current fees charged by Sky Zone’s approved supplier for point-of-sale (POS) system and related software

  • When payable:  As incurred.
  • Payable to Sky Zone’s approved supplier for POS-related software.

21.  Technology Suite:  then-current technology or license fee Sky Zone charges in connection with any Technology Suite it develops and/or designates for use in connection with the System

  • When payable:  As arranged.
  • Sky Zone has not currently developed or designated a Technology Suite to handle certain non-POS related technology within Sky Zone Parks, but it reserves the right to do so in the future.
  • If Sky Zone develops or designates such a Technology Suite in the future, it may require you to implement that technology and pay Sky Zone or its approved supplier a recurring fee for Technology Suite access and use.

22.  Taxes:  actual costs

  • When payable:  Upon demand.
  • You must pay Sky Zone the amount of any state or local sales, use, gross receipts, or similar tax that the state or local government authority imposes on fees which you pay to Sky Zone, without offset or deduction of any kind.
  • This does not include income-type taxes which a state or local government imposes on Sky Zone’s income.

23.  Annual Convention:  up to $1,000 per person, plus expenses

  • When payable:  15 days before convention begins.
  • If not paid by the required deadline, the fee will be automatically debited from your bank account.
  • At least one representative from each Park must attend the convention.
  • The cost of the convention does not include travel, lodging, meals, or wage expenses for the attendee.

24.  Space Planning Fee:  then-current fee. Currently, $350 per floor plan.

  • When payable:  Upon delivery of the Space Plan.
  • Sky Zone will provide the first 3 Space Plans at no cost to you.
  • Each additional floor plan after the third, if necessary, will cost you $350 per Space Plan.

25.  International Association of Trampoline Parks (IATP) Membership Fees:  then-current fee charged by the IATP. Currently, $100 per location, plus $200 per trampoline court in your Park.

  • When payable:  Annually.
  • Under the Franchise Agreement, membership in the IATP is required and the fee is payable to IATP.

26.  Insurance:  cost of the premium, plus a reasonable fee for Sky Zone’s services in procuring the insurance

  • When payable:  Upon demand.
  • Payable to your insurance provider; payable to Sky Zone only if you fail to maintain the minimum insurance it requires and it chooses to procure the required insurance for you.

27.  Indemnification:  amount of Sky Zone’s liabilities, fines, losses, damages, costs, and expenses (including reasonable attorneys’ fees)

  • When payable:  Upon demand.
  • Payable if Sky Zone incurs losses due to your breach of the Franchise Agreement or any other action or inaction by you or any other person (including employees, agents, officers) relating to your Park.

28.  Attorneys’ Fees for Review of Park Waivers:  actual costs

  • When payable:  As incurred.
  • If applicable to your state, all franchisees located within the particular state will share the costs for the attorney to review the Park waiver for that state.
  • All fees are imposed by and are payable to Sky Zone or its affiliates. All fees are non-refundable. All fees are uniformly imposed.

If you are looking for information on the estimated initial investment for a Sky Zone Indoor Trampoline Parks franchise, check out this post:   Franchise Costs:  Detailed Estimates of Sky Zone Indoor Trampoline Parks Franchise Costs


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