Considering a 9Round Fitness Franchise? Don’t Overlook These 23 Important Franchise Fees

Updated June 24, 2020.

If you are considering a 9Round Fitness franchise, don’t get blindsided by these 23 important franchise fees (from the initial franchise fee, to the royalty fee, to 21 other fees found in Items 5 and 6 of 9Round Fitness’s 2020 FDD).

• All fees are imposed by, payable to, and collected by 9Round unless otherwise noted. All fees are imposed uniformly and are non-refundable upon payment.

• As noted in the chart below, several fees paid to 9Round are subject to adjustment over the ten-year agreement term based on increases in the Consumer Price Index (CPI). Adjustments based on CPI will be made no more than once per year.

1.  Initial Franchise Fee:  $15,000 to $30,000

• You will pay 9Round Fitness an initial Franchise Fee when you sign a Franchise Agreement, which secures your Preliminary Designated Area.

• If you are acquiring franchise rights for a new, single Center, the initial Franchise Fee is $30,000.

• If you are acquiring franchise rights for two Centers as part of 9Round’s Development Incentive Program, the total initial Franchise Fee is $50,000 (a discount of $10,000). After the successful completion of your Development Incentive Program for two Centers, each additional Center shall have an initial Franchise Fee of $18,000.

• If you are acquiring franchise rights for three Centers through 9Round’s Development Incentive Program, the total initial Franchise Fee is $60,000 (a discount of $30,000). After the successful completion of your Development Incentive Program for three Centers, each additional Center shall have an initial Franchise Fee of $15,000.

• You must open the Center for business no later than nine months after the Franchise Agreement is signed. If you acquired franchise rights for two or three Centers as part of 9Round’s Development Incentive Program, you will sign two or three Franchise Agreements (as applicable) at the same time.

• You must open the second Center no later than twenty-one months after signing, and must open the third Center (if applicable) no later than thirty-three months after signing. If you fail to open a Center within the required time periods, 9Round may terminate the Franchise Agreement or, at its election, may eliminate any designated area protection afforded in the Franchise Agreement.

• If you do not participate in 9Round’s Development Incentive Program but later would like to acquire franchise rights as part of 9Round’s Step Up Program, the total initial Franchise Fee for the second Center is $25,000 (a discount of $5,000) and each subsequent Center has an initial Franchise Fee of $20,000 each (a discount of $10,000).

• If you are a veteran or a former member of the U.S. Armed Forces and were honorably discharged, 9Round will reduce your initial Franchise Fee for your first Center by 15% for an initial Franchise Fee of $25,500 for your first Center (“Veteran Discount”). This one-time Veteran Discount is in addition to the discounts under the Development Incentive Program, as discussed above, should you choose to participate in the Development Incentive Program.

• A $5,000 Franchise Fee will be utilized for existing franchisees purchasing an existing franchise location with a new Franchise Agreement that has a 10-year term. A $7,500 Franchise Fee will be utilized for new franchisees purchasing an existing location with a new Franchise Agreement that has a 10-year term.

• The initial Franchise Fee is payable in full when the Franchise Agreement is signed and is non-refundable. The initial Franchise Fee is uniform for all new franchisees but may differ for franchisees under prior existing agreements.

2.  Royalty Fee:  $600 per month

• Due Date:  Monthly.

3.  National Marketing Fee:  $200 or 2% of Net Sales, whichever is greater, per month

• Due Date:  Monthly.

4.  Local Advertising Spend, Local Marketing Fund, or Cooperative Advertising Contribution:  at least $6,000 per calendar year

• Due Date:  Monthly.

• Each local advertising Cooperative may elect to increase the monthly contribution if approved by a two-thirds majority of the members, and the minimum contribution is subject to adjustment by an amount not to exceed the increase in the CPI.

• Centers owned by 9Round and its affiliates are also members of their respective local Cooperative and each company-owned Center has the same voting rights as the franchised locations within the Cooperative.

• If the company-owned Centers comprise the majority of a given Cooperative, the maximum and minimum fees for that Cooperative will be consistent with the range stated in this Item 6.

5.  Technology Fee:  currently, $80 per month

• Due Date:  Monthly.

6.  9Round Music Fee:  $34 to $89 per month per Center

• Due Date:  Monthly.

• Subject to increase by an approved supplier.

7.  Heart Rate Zone System:  $139 per month

• Due Date:  Monthly.

• You will pay 9Round’s Approved Vendor the then-current monthly license fee.

• The fee may be collected through billing software with your monthly royalties.

8.  Audits:  cost of audit, plus interest at 12% or the maximum rate allowed by law

• Due Date:  Immediately upon receipt of bill.

• You pay for cost of audit only if it shows an understatement of Memberships or revenue.

9.  Ongoing Field Visit:  $2,500

• Due Date:  As arranged.

• Ongoing Field Visit will take place upon request from franchisee.

10.  Assignment Fee:  $250

• Due Date:  Upon application to assign your Franchise Agreement.

• Payable when you assign your Franchise Agreement to a corporation or other business entity owned by you or when you alter the percentage ownership of any minority partner, member, or other owner of your business, other than the Principal Owner.

11.  Relocation Fee:  $1,500 to $5,000

• Due Date:  Upon application to relocate your Center.

• Payable when you relocate your Center.

12.  Costs and Attorneys’ Fees:  will vary under circumstances

• Due Date:  As incurred.

• Payable only if your non-compliance with the Franchise Agreement causes 9Round to incur legal expenses.

13.  Interest:  12% per annum

• Due Date:  Upon demand.

• Payable only if you fail to pay amounts owed to 9Round when due.

14.  Indemnification:  will vary under the circumstances

• Due Date:  As incurred.

• You must reimburse 9Round if it is held liable for claims arising out of your franchise operations.

15.  Supplier Review Fee:  9Round’s costs and expenses, which it expects will range from $1,000 to $3,000 but may exceed this range depending on the product

• Due Date:  As incurred.

• Except for instances where 9Round designates a single source supplier, if you wish to purchase any products or services for which 9Round has established approved suppliers from an unapproved supplier, you may request 9Round’s consent in writing.

• You must pay the reasonable cost of the inspection and evaluation, and the actual cost of the test.

16.  Quality Assurance Inspections:  9Round’s out-of-pocket costs, which will vary

• Due Date:  Upon demand.

• If you fail to submit a “walk through” video, you must reimburse 9Round for its costs, including travel costs, that it incurs related to evaluating or inspecting your Center with its personnel or third party “mystery shoppers.”

17.  Modernization and Maintenance Costs:  9Round’s reasonable costs and expenses which will vary

• Due Date:  Upon demand.

• You must maintain the Center premises, and modernize them every five years.

• If you fail to do so, 9Round may complete these for you and you must pay it its reasonable costs.

18.  Securities Offering Costs:  will vary under the circumstances

• Due Date:  Upon demand.

• If you engage in a private offering of securities, 9Round must review the prospectus or other offering documents and you will pay its costs for that review.

19.  Ongoing Training:  $249 to $500 per person, plus your travel expenses. If 9Round’s representative provides additional training at your Center, 9Round may require you to reimburse its related travel and lodging costs for its representative.

• Due Date:  Upon demand.

• 9Round may require you and other key employees of the Center to attend ongoing training, which will be held at a location that it designates.

20.  Renewal Fee:  25% of the then-current initial Franchise Fee

• Due Date:  Before renewal.

21.  Administrative Fee:  $250 per enforcement effort (i.e., written or verbal notification and follow up), and $250 per week for each week that the issue remains unresolved

• Due Date:  Upon demand.

• 9Round may assess an administrative fee to compensate it for its time.

22.  Management Fee:  5% of the Center’s gross revenues, plus reimbursement of 9Round’s reasonable costs and expenses

• Due Date:  Upon demand.

• If you are in default of the Franchise Agreement, 9Round may send its personnel to manage the Center until the default is cured.

23.  Liquidated Damages:  for ceasing operations or committing a default that results in termination of your franchise rights, estimated present value of monthly fees through the end of the franchise term. For selling unauthorized products, an amount equal to 70% of gross revenues derived from the sale. For offering unauthorized services, an amount equal to 100% of gross revenues derived from the offering of services.

• Due Date:  Upon demand.

If you are looking for information on the estimated initial investment for a 9Round Fitness franchise, check out this post:   Franchise Costs:  Detailed Estimates of 9Round Fitness Franchise Costs