If you are considering a Workout Anytime franchise, don’t get blindsided by these 21 important franchise fees (from the initial franchise fee, to the royalty fee, to 19 other fees found in Items 5 and 6 of Workout Anytime’s 2016 FDD).
1. Initial Franchise Fee: $29,500
- You must pay Workout Anytime a lump sum initial franchise fee of $29,500 (the “Initial Franchise Fee”) to establish a single health club under a 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.
- Workout Anytime has implemented a program for franchisees who purchase additional Workout Anytime health club franchises where franchise fees payable to the franchisor for each additional health club franchise purchased will be discounted.
- To qualify, the percentage ownership structure of an entity franchisee must either be identical, or the principal owner must hold the same or greater percentage of equity as the initial Workout Anytime health club franchisee.
- Workout Anytime may end or change this policy, impose rules or conditions, or implement other discount programs, as and whenever it chooses in its sole discretion.
- During the fiscal year before the issuance date of the 2016 disclosure document, the Initial Franchise Fees paid by franchisees for a single Workout Anytime facility ranged from $0 to $29,500.
- The Initial Franchise Fee was waived for franchises granted to the principal owners and selected family members.
2. Development Fee: $49,400 for the right to open two franchised health clubs; and $63,500 for the right to open three franchised health clubs, plus an additional $19,500 for the right to open each additional franchised health club (up to a total of five)
- If Workout Anytime grants you the right to open two or more 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 and is calculated as follows:
- (i) $49,400 for the right to open two franchised health clubs; and
- (ii) $63,500 for the right to open three franchised health clubs, plus an additional $19,500 for the right to open each additional franchised health club (up to a total of five).
- You will be required to enter into Workout Anytime’s then-current form of Franchise Agreement for each franchised health club you wish to open under your Development Agreement, but you will not be required to pay any additional Initial Franchise Fee at the time you execute each of these Franchise Agreements.
- If you enter into a Development Agreement, you must execute Workout Anytime’s current form of Franchise Agreement for the first Workout Anytime business it grants you the right to open within your Development Area, concurrently with the Development Agreement.
- 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 Workout Anytime franchisees.
3. Monthly Royalty Fee: $499 per month commencing upon opening for business, and 4% of your Gross Revenues
- Due Date: On or before the 10th day of each month.
4. Advertising 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.
5. Additional Training Fee: for additional training at your franchised facility; will require your payment of costs associated with the transportation, food, and lodging of a Workout Anytime representative, along with a per diem consulting fee of $50
- Due Date: On demand.
6. 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.
7. Construction Plan Review Fee: $1,500 per site; additional $1,500 if more than 5 changes to plans
- Due Date: Upon Workout Anytime’s invoice.
- This fee compensates Workout Anytime’s costs in evaluating a proposed construction plan.
8. 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.
9. Relocation Fee: $5,000
- Due Date: Prior to relocation.
- You must pay this fee if you relocate your franchise.
10. Site Selection Fee: $1,500
- Due Date: Upon Workout Anytime’s invoice.
- Payable if you do not use Workout Anytime’s approved vendor.
11. Late Fee: $50
- Due Date: On demand.
- Applies to each monthly Royalty Fee that is more than 10 days late.
12. Alignment Deficiency Fee: $1,500
- Due Date: On demand.
- Workout Anytime can assess this fee if you fail to cure certain defaults.
13. Management Fee: $1,000 per day
- Due Date: On demand.
- Payable if Workout Anytime steps in to manage your club due to your default.
14. 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.
15. 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.
16. 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.
17. Annual Convention Fee: $525
- Due Date: Deducted from monthly draft 90 days prior to convention.
- Payable regardless of whether you attend the Convention.
18. 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.
19. Software License Fee: currently $115 per month
- Due Date: As billed by vendor.
- Paid to ABC Financial Services, Inc.
20. Inspection Fee: $125 per quarter
- Due Date: On demand.
21. Technology Fee: $395 per month
- Due Date: On or before the 10th day of each month.
- To compensate Workout Anytime for the management of its website and the franchisee’s linked web pages, email, and other technology.
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