Considering a 9Round Fitness Franchise? Don’t Overlook These 20 Important Franchise Fees

If you are considering a 9Round Fitness franchise, don’t get blindsided by these 20 important franchise fees (from the initial franchise fee, to the royalty fee, to 18 other fees found in Items 5 and 6 of 9Round Fitness’s 2016 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 $24,000

• You will pay 9Round Fitness an initial franchise fee when you sign a Franchise Agreement.

• If you are acquiring franchise rights for a single Center, the initial franchise fee is $24,000.

• If you are acquiring franchise rights for two Centers according to 9Round’s Market Accelerator Program, the total initial franchise fee is $44,000 (a discount of $4,000).

• If you are acquiring franchise rights for three Centers according to 9Round’s Market Accelerator Program, the total initial franchise fee is $59,000 (a discount of $13,000).

• If you are acquiring franchise rights for more than three Centers at the same time, the initial franchise fee for each Center after the third unit is $15,000.

• 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:  $449 per month

• When payable:  Monthly.

• Subject to increase by an amount not to exceed the increase in Consumer Price Index.

3.  National Marketing Fee:  $75 per month

• When payable:  Monthly.

• Subject to increase by an amount not to exceed the increase in Consumer Price Index.

4.  Local Advertising Spend, Local Marketing Fund, or Cooperative Advertising Contribution:  at least $6,000 per rolling 12-month period (average of $500 per month)

• When payable:  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.  Member Services Fee:  currently $49 per month

• When payable:  Monthly.

• As technology and member demands change, 9Round anticipates providing different or additional services available to members. Some of these services may include different or additional member service fees and you agree to participate in 9Round’s future member service initiatives and pay the applicable fees that 9Round imposes periodically.

• Currently, member services include access to the 9Round Nutrition Program, which includes access to 9Round’s Online Journal, nutrition guide, Q&A forum, food matrix, and periodic emails and nutritional tips.

• The current charge is $49 per Center per month.

6.  9Round Radio Fee:  $35 per month per store

• When payable:  Monthly.

• Subject to increase by an approved supplier.

7.  Heart Rate Zone System (optional):  $150 per month

• When payable:  Monthly.

• If you choose to install the currently approved heart rate monitor system in your Center, 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.  Website Fee:  $25 per month

• When payable:  Monthly.

• Subject to increase by an amount not to exceed the increase in the Consumer Price Index.

9.  Audits:  cost of audit, plus interest at the maximum rate allowed by law

• When payable:  Immediately upon receipt of bill.

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

10.  Transfer Fee:  $4,000 if transferee is an existing 9Round franchisee; if the transferee is new to the System, the transfer fee is equal to the then-current initial franchise fee

• When payable:  Upon application for consent to transfer.

• Payable when you transfer your franchise.

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

• When payable:  As incurred.

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

12.  Interest:  18% per annum

• When payable:  Upon demand.

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

13.  Indemnification:  will vary under the circumstances

• When payable:  As incurred.

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

14.  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

• When payable:  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.

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

• When payable:  Upon demand.

• You must maintain the Center premises after five years 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.

16.  Securities Offering Costs:  will vary under the circumstances

• When payable:  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.

17.  Ongoing Training:  $100 to $300 per person, plus reimbursement of 9Round’s related travel and lodging costs for its representative

• When payable:  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.

18.  Renewal Fee:  25% of the then-current Initial Franchise Fee

• When payable:  Before renewal.

19.  Administrative Fee:  $250 per enforcement effort, such as notifying you of a violation of your franchise obligations

• When payable:  Upon demand.

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

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

• When payable:  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.

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

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