Considering a Snap Fitness Franchise? Don’t Overlook These 27 Important Franchise Fees

This post was updated on June 25, 2017 to reflect information from Snap Fitness’s 2017 FDD.

If you are considering a Snap Fitness franchise, don’t get blindsided by these 27 important franchise fees (from the initial franchise fee, to the royalty fee, to 25 other fees found in Items 5 and 6 of Snap Fitness’s 2017 FDD).

• All fees are imposed by, payable to, and collected by Snap Fitness unless otherwise noted. All fees are imposed uniformly and are nonrefundable upon payment.

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

1.  Initial Franchise Fee:  $24,500 to $29,500

• You will pay Snap Fitness an initial franchise fee when you sign a Franchise Agreement. If you are acquiring franchise rights for a single Club, the initial franchise fee is $29,500. If you are acquiring franchise rights for three Clubs according to Snap Fitness’s Market Accelerator Program, the total initial franchise fee is $75,000.

• If you are an existing franchisee, you are eligible for a reduced initial franchise fee of $24,500.

• The initial franchise fee is payable in full when the Franchise Agreement is signed, and is considered fully earned and nonrefundable upon payment.

• Except for the differences described here, the initial franchise fee is uniform for all new franchisees.

• Snap Fitness’s standard initial franchise fee was different in the past, and some of its existing franchisees have the right to develop additional Clubs under existing agreements and on different terms.

• In addition, Snap Fitness has discounted the initial franchise fee in the past, and may discount it in the future in situations where Snap Fitness feels it is appropriate.

• Snap Fitness currently participates in the IFA’s VetFran program and offers a $5,000 discount off the initial franchise fee for qualified veterans. If you qualify for this program, the initial franchise fee for one Club is $24,500 and the total initial franchise fee for three Clubs under the Market Accelerator Program is $70,000.

2.  GO FAST™ Kit:  $20,359 to $31,000

• Before opening, you will purchase the GO FAST kit from Snap Fitness or its affiliate which includes Club branding design fee, marketing and promotional materials, wall graphics, personal training supplies and free weights, an initial inventory of access cards, certain fixtures including cabinets and cubbies, flooring, and MyZone System.

• The current purchase price for the standard GO FAST kit is $26,100, plus shipping, and is payable in full before the Club opens. If you choose to add items to the GO FAST kit (for example, tanning or additional weights or cubbies), the purchase price may be higher and will generally range from $26,000 to $33,500.

• In 2016, the amounts paid by franchisees opening new Snap Fitness clubs for the GO FAST kit ranged from $10,805 to $53,760 (plus tax).

• The GO FAST kit price is payable in full in advance and is nonrefundable upon payment.

3.  In Club Technology Package:  $25,000 to $38,495

• You will pay Snap Security for the in club technology package before your Club opens. The standard in club technology package includes door access components, panic system, camera and surveillance equipment, televisions, FitnessOnDemand, and related items.

• The price for the standard in club technology package ranges from $15,095 to $28,825, which includes installation.

• In 2016, the payments for these products and services ranged from $5,230 to $25,320 (plus tax). The amount you pay will depend on the square footage of the club, the number of doors, and whether you purchase certain optional components (such as TVs) from Snap Security or another vendor that meets Snap Fitness’s specifications.

4.  Snap Asset Protection Plan:  $250 to $800

• Snap Fitness has established an insurance plan for the benefit of its franchisees called the Snap Asset Protection Plan (SAPP). You must have insurance from the date you sign your lease. The insurance premium is collected by Snap Fitness as the billing administrator and forwarded to the insurance providers.

• Snap Fitness estimates the amount you pay for this insurance prior to opening will be $250 to $800.

5.  Continuing Fee:  $529 per month

• Due Date:  Monthly.

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

6.  National Marketing Fee:  $145 per month

• Due Date:  Monthly.

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

7.  Local Marketing Fund or Cooperative Advertising Contribution:  $200 per month

• 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. The Spokane, WA cooperative increased the contribution to $250 per month.

• Clubs owned by Snap Fitness and its affiliates are also members of their respective local Cooperative and each company-owned club has the same voting rights as the franchised locations within the Cooperative. If the company-owned clubs comprise the majority of a given Cooperative, the maximum and minimum fees for that Cooperative will be consistent with the range stated here (subject to adjustment for increases in the CPI).

8.  Member Service Fees:  currently, one-time $1.00 online services fee for each new member

• Due Date:  Monthly.

• The current member service fees are for the exercise and nutrition tools available to your members through their personal webpage at mysnapfitness.com. These services are free to members.

• As technology and member demands change, Snap Fitness 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 Snap Fitness’s future member service initiatives and pay the applicable fees.

9.  Website Fee:  $39 per month

• Due Date:  Monthly.

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

10.  Membership Processing Fees and Cost:  one-time fee of $5.60 for each new membership agreement; continuing $0.59 fee per month membership maintenance fee for each membership enrolled at your Club; then-current price for door access cards (currently $5.00)

• Due Date:  One-time fees – at enrollment by electronic funds transfer. Ongoing maintenance fee for each membership enrolled at your Club, transferred every 5th day of the month for which the fee is due.

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

• All door access/membership cards and/or member ID cards are in a numeral sequence and must be purchased through Snap Fitness.

11.  Technology Fee, including Fitware:  $185 per month

• Due Date:  Monthly.

• You pay Snap Fitness’s affiliate the then-current monthly license fee for the club management and billing software and associated technology.

12.  FitnessOnDemand:  $199.95 per month

• Due Date:  Monthly.

• FitnessOnDemand is an automated group fitness class system. You will pay Wholesale Fitness Supply d/b/a Fitness On Demand the then-current monthly fee for access to the programmed classes.

• You may also add additional content options for additional fees.

13.  MyZone:  $150 per month

• Due Date:  Monthly.

• MyZone is a heart rate monitor system. You will pay Wholesale Fitness Supply d/b/a Fitness On Demand the then-current monthly license fee.

14.  Reimbursement Processing Fee:  $35 per month

• Due Date:  Monthly.

• Snap Fitness administers certain reimbursements of membership dues for insurance companies, affinity groups, and national accounts.

• The current reimbursement processing fee is payable for any month that the reimbursements of membership dues for a Club from these accounts is $35 or more.

• The member engager is a tool to assist you with engaging your members and includes automated e-mails, templates, and more.

15.  Convention:  currently, $129 per club or attendee

• Due Date:  Annual.

• All franchisees are required to attend the annual convention.

16.  Decline Recovery Service:  $1.00 per decline

• Due Date:  As incurred.

17.  Online Acquisition Fee:  $15 per online enrollment

• Due Date:  As incurred.

18.  Audits:  cost of audit, plus interest

• Due Date:  Immediately upon receipt of bill.

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

19.  Transfer Fee:  $5,000 if transferee is an existing Snap Fitness franchisee. If the transferee is new to the system, the transfer fee is equal to the then-current Initial Franchise Fee.

• Due Date:  Upon application for consent to transfer.

• Payable when you transfer your franchise.

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

• Due Date:  As incurred.

• Payable only if your noncompliance with the Franchise Agreement causes Snap Fitness to incur legal expenses.

21.  Insurance:  $250 to $400 monthly

• Due Date:  As incurred.

22.  Interest:  18% per annum

• Due Date:  Upon demand.

• Payable only if you fail to pay amounts owed to Snap Fitness when due.

23.  Indemnification:  will vary under the circumstances

• Due Date:  As incurred.

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

24.  Supplier Review Fee:  Snap Fitness’s costs and expenses, which are currently expected to range between $1,000 and $3,000, although costs could exceed those amounts depending on the product

• Due Date:  As incurred.

25.  Modernization and Maintenance Costs:  Snap Fitness’s then-current design fee (currently $500) and if applicable, its reasonable costs and expenses which will vary

• Due Date:  Upon demand.

• You must maintain the franchise according to Snap Fitness’s system standards and modernize the Club after five years.

• In connection with your modernization, you will pay a $500 design fee.

• In addition, if you fail to maintain or modernize your club according to its standards, Snap Fitness may complete these for you and you must pay it its reasonable costs.

26.  Additional Assistance or Training:  currently, $250 per day, plus travel costs

• Due Date:  Immediately upon notice from Snap Fitness.

• Snap Fitness may require you to receive additional training or assistance if you are not meeting its standards.

• You are responsible for the cost of that training or assistance at the then-current rate.

27.  Securities Offering Costs:  will vary under the circumstances

• Due Date:  Upon demand.

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

Tagged as: Snap Fitness