Considering a Workout Anytime Franchise? Don’t Overlook These 26 Important Franchise Fees

Updated August 25, 2019.

If you are considering a Workout Anytime franchise, don’t get blindsided by these 26 important franchise fees (from the initial franchise fee, to the royalty fee, to 24 other fees found in Items 5 and 6 of Workout Anytime’s 2019 FDD).

1.  Initial Franchise Fee:  $35,000

• You must pay to Workout Anytime a lump sum initial franchise fee of $35,000 (the “Initial Franchise Fee”) to establish a single health club under the Franchise Agreement.

• The Initial Franchise Fee is due upon the signing of the Franchise Agreement.

• The Initial Franchise Fee shall be fully earned by Workout Anytime upon payment and is not refundable, in whole or in part, under any circumstance.

• Except as disclosed in this Item 5, Workout Anytime uniformly imposes the Initial Franchise Fee on all parties that are purchasing a single franchised health club.

2.  Development Fee:  $55,000 for 2 Clubs; $60,000 for 3 Clubs

• If Workout Anytime grants you the right to open up to 2 additional franchised health clubs under a Development Agreement, you must pay Workout Anytime a one-time Development Fee upon executing your Development Agreement.

• Your Development Fee will depend on the number of franchised health clubs Workout Anytime grants you the right to open within the Development Area. The Development Fee consists of Initial Franchise Fees for all the Clubs you commit to opening.

• The Initial Franchise Fees under a Development Agreement are as follows: (i) a total of $55,000 for 2 Clubs; and (ii) a total of $60,000 for 3 Clubs.

• If you enter into a Development Agreement, you must execute Workout Anytime’s then-current form of Franchise Agreement for each of the Workout Anytime businesses the franchisor grants you the right to open within your Development Area concurrently with the Development Agreement.

• The Development Agreement will contain a schedule for the required opening of the Clubs (the “Development Schedule”). The failure to meet the Development Schedule is a material breach of the Development Agreement and is grounds for termination.

• Your Development Fee will be deemed fully earned upon payment and is not refundable under any circumstances. The Development Fee described above is calculated and applied uniformly to all franchisees.

3.  Monthly Royalty Fee:  4% of your Gross Revenues throughout the Term, plus $499 during years 1-5, $549 during years 6-10, and $599 during years 11-15

• Due Date:  On or before the 10th day of each month, commencing when you begin membership pre-sales.

4.  National Brand Development Fee:  up to 2% of the monthly Gross Revenues collected by both you and third-party vendor(s) for your benefit; currently, 1%

• Due Date:  On or before the 10th day of each month, commencing when you begin membership pre-sales.

5.  Local Advertising:  minimum of $2,000 per month (subject to increase by up to 200% if you don’t meet the Minimum Monthly Gross Revenue Requirement)

• Due Date:  As incurred, with periodic reports to Workout Anytime upon request.

• Workout Anytime can require you to pay this amount directly to it and it will then spend this amount in your territory.

6.  Computer Corruption Fee:  will vary under the circumstances. Charges will include reimbursement of charges from outside vendors and verifiable internal expenses in relation to the issue.

• Due Date:  Upon demand.

• Payable in the event that a virus that is on your computer is found to have infiltrated the corporate computer support services and caused a black out or deterioration of services and you do not have an acceptable virus protection software subscription that is properly installed on all connecting devices.

7.  Additional Training Fee:  for additional training at your franchised facility, Workout Anytime will require your payment of costs associated with the transportation, food, and lodging of its representative, along with a per diem consulting fee of $500

• Due Date:  On demand.

8.  Renewal Fee:  $2,500

• Due Date:  Before renewal.

• Payable when, and if, you renew your Franchise Agreement. There are other condition to renew.

9.  Assignment/Transfer Fee:  50% of the then-current Initial Franchise Fee

• Due Date:  Prior to the transfer.

• You or your buyer must pay this fee to Workout Anytime when your franchise is sold. There is no fee if the transfer is to an entity owned solely by you.

10.  Non-Approved Vendor Evaluation Fee:  $1,500

• Due Date:  Upon Workout Anytime’s invoice, prior to evaluation of vendor.

• This fee compensates Workout Anytime’s costs in evaluating a proposed non-approved vendor.

11.  Relocation Fee:  $5,000

• Due Date:  Prior to relocation.

• You must pay this fee if you relocate your franchise.

12.  Lease Review Fee:  $1,500

• Due Date:  Upon Workout Anytime’s invoice.

• Payable if you do not use Workout Anytime’s approved vendor.

13.  Late Fee:  $50

• Due Date:  On demand.

• Applies to each monthly Royalty Fee that is more than 10 days late.

14.  Alignment Deficiency Fee:  up to $1,500. If deficiency is due to cleanliness condition of the Club, Workout Anytime has the right to also charge the cost of required remedial cleaning and its service fee.

• Due Date:  On demand. Payable by Workout Anytime’s deduction from your monthly draft.

• Workout Anytime can assess this fee if you fail to cure certain defaults.

15.  Management Fee:  $1,000 per day

• Due Date:  On demand.

• Payable if Workout Anytime steps in to manage your club due to your default.

16.  Construction Management Fee:  $5,000

• Due Date:  On demand.

• Payable to Workout Anytime if you do not use the franchisor’s approved construction management vendor; only applies to first Club developed.

17.  Interest:  the greater of 18% per annum and the highest rate allowable by law on any unpaid balance

• Due Date:  On demand.

• Payable on all overdue amounts.

18.  Taxes (Including Use Tax):  varies by State and County, with a projected low of 0% to a high of 9.75%

• Due Date:  Payable to the taxing authority. Check on payment requirements.

• Some States and Local authorities impose a use tax on the purchase price of the equipment.

19.  Annual Convention Fee:  currently, $525 per club for up to 2 attendees

• Due Date:  Deducted from monthly draft 90 days prior to convention.

• Payable regardless of whether you attend the Convention. The Convention Fee will not exceed $750 per person.

20.  Indemnification:  will vary based on circumstances

• Due Date:  Upon demand.

• You must indemnify Workout Anytime, its affiliates, and its respective members, owners, shareholders, directors, officers, managers, employees, and agents, from and against all claims arising out of your failure to pay taxes, your operation of the Club, or your actions, failure to act, negligence, or willful conduct.

21.  Additional Required Training:  currently, $500 per day per trainer, plus travel and room and board

• Due Date:  Upon Workout Anytime’s invoice.

• If you fail to meet the Minimum Pre-Sale Membership and/or Minimum Monthly Gross Revenue Requirements, Workout Anytime may require you to attend additional training at your expense.

22.  Audit Fee:  cost of audit, plus interest at 15% on the unreported or underreported revenues per annum

• Due Date:  Upon receipt of bill.

• Paid only if audit reveals underreporting of royalty and processing fees; Workout Anytime has the right to appoint an outside auditor.

23.  Software License Fee:  currently, $60 per month

• Due Date:  As billed by vendor.

• Paid to ABC Financial, Workout Anytime’s current payment processing vendor.

24.  Inspection Fee:  $125 per quarter

• Due Date:  On demand.

25.  Technology Fee:  currently, $595 per month

• Due Date:  On or before the 10th day of each month, commencing when you begin membership pre-sales.

• To pay Workout Anytime for technology platforms such as website, Outlook e-mail, and other assigned technology tools that are included, excluding marketing-related technology such as mobile apps.

26.  Music Licensing Fees:  as determined by Licensor

• Due Date:  As invoiced by Workout Anytime or the Licensor.

• If Workout Anytime maintains a Master License, it will deduct the fee from your monthly draft.

• You will be responsible for all licensing fees due for music or other licensed media at the Club.

• If Workout Anytime enters into a Master License, you will pay the franchisor the fee.