Detailed Information on Snap Fitness’ Initial Franchise Fee, Royalty Fee + 23 Other Fees (Items 5 and 6, 2023 FDD)

1.  Initial Franchise Fee:  $34,500 to $39,500

• 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 $39,500.

• If you are an existing franchisee acquiring your second or subsequent Club, you are eligible for a reduced initial franchise fee of $34,500.

• The initial franchise fee is payable in full when the Franchise Agreement is signed, and is considered fully earned and non-refundable 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 Snap Fitness deems 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 $34,500.

2.  Area Development Fee:  $89,500 for your first three Clubs and $25,000 for each additional Club you agree to develop under the Area Development Agreement

• If you sign an Area Development Agreement, you must develop a minimum of three Clubs within the Development Area. In connection with signing the Area Development Agreement, you will pay Snap Fitness an Area Development Fee calculated as follows: $89,500 for your first three Clubs and $25,000 for each additional Club you agree to develop under the Area Development Agreement.

• The Area Development Fee is payable in full when the Area Development Agreement is signed, and is considered fully earned and non-refundable upon payment. That portion of the Area Development Fee paid for each Club to be developed under the Area Development Agreement will be applied to the initial franchise fee for each Club opened under the Area Development Agreement. As such, you will not pay Snap Fitness an initial franchise fee when you sign a Franchise Agreement for a Club developed under the Area Development Agreement. All other fees provided for in the Franchise Agreement will apply.

3.  Snap Asset Protection Plan:  $454 to $1,362

• 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 that meets Snap Fitness’ minimum requirements and may obtain insurance coverage through SAPP or from a different source provided your coverage meets Snap Fitness’ minimum requirements.. 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 $454 to $1,362.

4.  Royalty Fee:  6% of Gross Revenue

• Due Date:  Monthly, on the 1st of the Month.

• Gross Revenue means the aggregate of all revenue derived from all goods and services sold by you from or relating to the Club.

5.  National Marketing:  up to 4% of Gross Revenue, currently 2%

• Due Date:  Monthly, on the 1st of the Month.

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

• Due Date:  Monthly.

7.  Local Marketing:  $400 per month

• Due Date:  As incurred.

8.  Technology Fee:  $310 per month

• Due Date:  Monthly, on the 1st of the Month.

9.  Door Access Cards:  then-current price (currently $5.50)

• Due Date:  As incurred.

• You must purchase any additional door access cards from Snap Fitness, its affiliate, or its designated supplier.

10.  FitnessOnDemand:  $199.95 per month

• Due Date:  Monthly.

• FitnessOnDemand is an automated group fitness class system. If you choose to offer FitnessOnDemand at your Club, you will pay Snap Fitness’ affiliate, FitnessOnDemand, LLC, the then-current monthly fee for access to the programmed classes.

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

11.  Myzone:  $149.99 per month

• Due Date:  Monthly.

• Myzone is a heart rate monitor system. You will pay Snap Fitness, and it will remit to its affiliate, Wholesale Fitness Supply, the then-current monthly license fee.

12.  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.

13.  Medical Panic System:  $29.95 per month

• Due Date:  Monthly.

• You pay Snap Fitness and it pays an approved supplier, or you pay a designated supplier directly, the monthly fee for this service.

14.  Convention:  Snap Fitness’s then-current fee (currently, $1,800 with accommodations)

• Due Date:  Annual.

• All franchisees are required to attend the annual convention. If you fail to attend the convention, Snap Fitness reserves the right to charge you its then-current non-attendance fee (currently, $1,000 per Club).

15.  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 by 2% or more.

16.  Mystery Shopper Fee:  cost of mystery shopper

• Due Date:  Immediately upon receipt of bill.

• Snap Fitness reserves the right to require you to reimburse it for any mystery shopper program it implements.

17.  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.

18.  Renewal Fee:  $0

• Due Date:  Not applicable.

19.  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.

20.  Insurance:  $411 to $454 monthly

• Due Date:  As incurred.

21.  Interest and Late Fee:  18% per annum in interest, late fee of the greater of 10% of past due or $150 per month

• Due Date:  Upon demand.

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

22.  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.

23.  Supplier Review Fee:  Snap Fitness’ 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.

24.  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.

25.  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 and expenses (including attorney’s fees) for that review.